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INE: Mortgages Increased By 1.6% In 2014

27 February 2015 – Expansión

The number of mortgages granted for homes increased by 1.6% in 2014 with respect to the previous year, to 202,954, which meant that the mortgage market returned to positive growth after seven consecutive years of decreases; and so a change in the sector’s cycle begins.

The signing of new mortgages for the purchase of homes rose by 1.6% in 2014 to reach 202,954, the first increase after seven years of decline, according to extracts from the Mortgage Statistics published by INE today.

The number of new mortgages had not increased on a year-on-year basis since 2007, a year in which more than a million more mortgage contracts than last year were signed – 1,238,890, to be exact – therefore, despite the recovery that appears to taking place in the sector, the market is still well below its pre-crisis figures.

The signing of mortgages has fallen steadily since 2007: in 2013, the number decreased by 27.1%, whilst in 2012, 2011 and 2008, they fell by more than 32%. In 2009, they dropped by 22.2% and in 2010 and 2007, the declines were more moderate, with decreases of 6.6% and 7.7%, respectively.

Last year the size of the average mortgage taken out over homes also grew, by 2.1% to €102,130, whilst the total amount of capital loaned rose by 3.8% during the course of the year to reach €20,727 million.

In December 2014 alone, the number of new mortgages recorded in the property register grew by 28.9%, compared with the same month in 2013, whereby completing seven consecutive months of increases. During the last month of the year, 15,962 contracts were signed in total, for an average value of €124,059, also higher than a year earlier.

Overall, in 2014, the total number of mortgaged properties increased by 11.7%, to amount to 314,018. Of those, 22,342 were urban (+12.5%) and 1,054 were rural (-3.2%).

For Fernando Encinar, Head of Research at Idealista, “this increase in the number of mortgages granted represents good news for the sector. Banks have started to hang the “mortgage” sign in their branches once again and demand is beginning to respond, encouraged by the economic recovery and the suppression of prices”.

Manuel Gandarias, Director of the Research Unit at pisos.com offered a similar view: “Everything seems to indicate that the mortgage market will reactivate briskly. Following the significant decreases observed since 2007, the data in 2014 represents the first annual increase in the granting of loans, and the second half of the year really stood out in terms of growth”.

“Similarly, the average size of mortgages has experienced an increase, which is indicative that the banks have recovered the financing role that the sector was has been asking for”, he continued.

“Competitiveness between entities to win the best clients has returned to the mortgage sphere and offers will continue to attract sales and purchases. Everyone will have to pay attention to the evolution of Euribor and the movements of the European Central Bank (ECB), whose measures have accelerated this opportunity. Although the future looks brighter, we should remember that this is the principle of stabilisation. Financing is a fundamental element for families and it is a clear indicator of the process of improvement.

Andalucía, Madrid and Cataluña lead the increases

As usual, the autonomous regions with the highest volumes of mortgages granted in 2014 were Andalucía (36,860), Madrid (35,461) and Cataluña (30,261).

The regions in which the most capital was lent to constitute mortgages were Madrid (€5,134.9 million), Cataluña (€3,439.1 million) and Andalucía (€3,219.0 million).

Original story: Expansión

Translation: Carmel Drake