Cashier,
I'm afraid the Spanish situation is a lot worse than Ireland - there are approximately three million empty units, unemployment is 25% approx - they have only just started into austerity measures.
Piedpiper
In answer to the original poster if you post on the website I suggested - there are more people on there who are very savy about Spain but in my opinion from following the Spanish situation - your friend will not be able to walk away from his spanish property - I have read that the banks have followed people to the UK and don't be under illusion they will not. I know of someone who did not pay the urbanisation fees (maintenance fees) for several years for his property in Spain, the administrator has brought them to court in Ireland to claim back their fees plus interest. Sorry to be the bearer of bad news but your friend will have to address this issue and get a good solicitor in Spain to sort out - I don't think any of us can walk away from taking out a mortgage and not repay. Has he tried at all even to sell the property, at the moment he will be taking at least 30% hit - depending on which area he is in - I think even at this better do it now than 1 year down the line when things might be worse.