Catalonia Suffers Housing Bubble Effects

21/04/2014 – El Confidencial

The recesssion acutely affected Catalonia due to high indebtness in the mortgages given to individuals that showed 34% of the total. On the other side, the paid-off houses constituted 35% of all. The number is important as ten years earlier, in 2001, mere 27.6% of owners had residential loans for the purchase of the first house. In short, mortgage granting in Catalonia doubled within a decade.

Thus, in 2001 there were 637.000 ongoing mortgages, while in 2011 the number soared by 57% and crossed a million. Second dwellings have not been taken into account but presumably they would push the figures much higher.

According to Economy department of the local Government, considerable presence of property-backed loans “reflects intensive deleveraging process between the years 2001-2008 when credit conditions were very attractive”.

Also, the data coming from the National Institute of Statistics confirms the increase. According to this source, the number of principal homes in Catalonia rose by 629.000 units (+27%). In turn, the number of second houses shrank by 75.000 units.

The third part comprise dwellings that are neither paid-off, nor ongoing mortgages. About 19.8% of them are rented.

“While analyzing the 2001 data, one may observe that property ownership was by 79.1% greater than it is now, whereas the rent scope by 16.6% smaller than presently”. In 2005, the first reached a 77.8% cap.

Moreover, over the aforementioned decade, the foreign population in Catalonia grew significantly and in the households where at least one foreigner lived, “the percentage of house renting shot up by 58.6%.”

Catalonia disposes of the largest stock in the entire country, with 19.8% houses for rent, beaten only by the Balearic Islands with 21.6%. In Madrid, this kind of stock constitutes 17.4% of the total available.

 

 

Original article: El Confidencial (by Marcos Lamelas)

Translation: AURA REE

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