Spain August Mortgage Approvals Up 23.8% YoY

28/10/2014 – Expansion

Three months have already been marked by the upward path. In year-on-year terms, August mortgage approvals stood 23.8% higher than they did in 2013, data of the National Istititute of Statistics (the INE) showed. The sudden jump is slightly smoother than the July 28.8% upsurge.

Precisely, 15.040 new loans for home purchases were granted throughout August, and 18.107 contracts were signed a month earlier. This means a 16.9% decline in regard to July and the largest July-on-August slump in five years.

Experts foresee a acceleration in property sales at the end of the year caused by the taxation changes to come into force in 2015. Also, they belive the results of the Spanish banks from the stress test might give an impulse to new mortgages.

Average amount of an August mortgage showed €150.250, 24.7% more than in the same month in 2013. Home mortgages averaged at €102.430, up 5.8%, whereas the total equity lent amounted to over €1.54 billion, also up 5.8% year-on-year.

Accoding to the information provided by the official statistics office of Spain, 93.9% of August mortgages applied the floating interest rate, while the remaining 6.1% employed the fixed rate. Euribor benchmark was applied in most of the cases.

Interest rates for all-sort property purchase and terms averaged at 4.12% and 21 years respectively. Rates for homes only post lower, at 3.76%, situating ‘12.4% under the August 2013 figures’, the INE informs.

Other noteworthy numbers come from the statistics on subrogation operations. Creditor subrogations increased 7.9%, whilst debtor subrogations dropped 20.7%.

By Spanish regions, Andalusia approved most new mortgages in August (2.823 contracts), then Madrid (2.336) and Catalonia (2.049).

Solely two regions registered falls: La Rioja (down 40.9%) and the Canaries (down 15.5%). On the contrary, banks lent much more in the Balearic Islands (up 83.4%), Cantabria (up 68.4%) and Castille-La Mancha (up 57.6%).

Speaking of the average amount lent for home purchase, Madrid wins with a total of €371.8 million, followed by Andalusia (€259.8 million) and Catalonia (€223.3 million).

Manuel Gandarias, Research director at pisos.com, assures that ­’mortgage approvals advance at a fair pace in line with strict solvency requirements imposed by the financial entities. No doubt that they are more active, competing to offer best loans, fiddling with interest rates and forgetting about the controversial ground clauses‘.

In opinion of the head of Research at fotocasa.es, Beatriz Toribio, ‘in spite of better outlook for the Spanish mortgage market, new approvals still remain low and limited as banks target the new products exclusively at solvent customers who make around 2.000 Euros monthly’.

 

Original article: Expansión (by M. G. M.)

Translation: AURA REE

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