70% of the properties sold in Spain are paid without a mortgage

Of all mortgages signed in Spain, only half are for the financing of homes. And only one third of all homes bought in Spain is paid with these loans. In the second quarter of the year, the number of mortgages for the payment of homes represented only 31% of the transferred residential buildings. Only three in any 10 houses that are sold are financed the traditional way. In fact, mortgages were not the option chosen by the majority in 42 of the 52 provinces in Spain in the first quarter of the year. In April, exactly the same happened in 13 of the 17 regions.

It is important to differentiate the cause for the granting of a mortgage, which is specified in the deed: for building, for business financing, for the payment of a plot, of a rural property, of a garage, etc… In fact, in the years of the real estate boom there were more mortgages than sales of properties.

So how are the other properties paid? According to experts, these are acquisitions from banks, property packages bought by the international investment funds, houses paid for by foreigners with foreign mortgages or with other types of financing. There could also be a marginal percentage of mortgages where it is not specified that the funds will be destined to the acquisition of a property, something which is not probable. Finally, there are properties which are paid cash (by Spaniards and by foreign citizens). (…)

Julio Rodríguez, former president of the Banco Hipotecario, declares: “There are more acquisitions of properties which are carried out in cash. And this is directly related to the increase of sales to foreigners. The foreign investment funds are more active than before, as there is more cash in the USA and Japan due to the monetary stimulus packages”. And he adds: “The operations carried out by funds are without mortgages, as they have their own financing.”

Rodríguez adds: “The foreigners buy, above all, on the Mediterranean coast, packages of properties”. The foreign buyers are the majority in the province of Alicante. They buy more residential properties than the Spaniards. (…)

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