BBVA: Declining Interest Rates Boosted Demand For Housing In 2014

3 January 2015 – El Mundo

The financial institution has noted a “clear change in the trend” of mortgage financing and concludes that the expectations of business-owners in the residential construction sector “have improved slightly”.

BBVA Research, the research arm of the financial entity, estimates that 350,000 homes were sold in 2014. It explains that this improvement in the number of transactions was due to the evolution of employment and a moderation in interest rates.

In its latest “Flash Real Estate Spain” report, the bank said that “the evolution of employment, which grew by more than expected, and a further decline in interest rates, continued to favour the recovery in the underlying demand” for housing.

More mortgage lending activity.

According to BBVA, “the increase in the number of sales was also reflected in terms of mortgage financing”, as evidenced by the evolution of loans granted for the purchase of new homes during the month of November, which grew at a year on year rate of 34%.

During the first eleven months of 2014, the number of loans granted for house purchases increased by 45% in year on year terms, “which suggests a clear change in the mortgage financing trend”, said the research service. Data for the third quarter 2014 shows that gross household incomes rose for the second consecutive quarter.

Furthermore, the expectations of business-owners in the residential construction segment “have improved slightly”. Thus, in December 2014, the climate index for the residential construction sector recovered the ground lost in the previous month and ended the year 17.2 points higher than at the end of 2013, in year on year terms. All of the components of this index increased, above all those relating to employment and production.

Original story: El Mundo

Translation: Carmel Drake

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