Housing Prices & Mortgages Witness Sharp YoY Swings in August

15/10/2014 – El Mundo

Real estate activity, defined as housing sales, keeps on fluctuating in terms of pricing adjustment and lending. According to the August statistics piled up by the General Council of Spanish Notaries, based on transactions sealed exclusively during that month, shows, that the number of deals on dwellings reached 17.045 contracts, meaning a 13.9% increase year-on-year, meanwhile their values decreased 8.6%, completely denying the previous reports proving stabilization or even rise in prices.

The Notaries explain that the upsurge in property sales over the last months is due to normalization in the number of operations after the abolishment of the tax deduction on home purchase at the end of 2012, but now the sales went more stable.

By dwelling types, apartments and single-family homes shot up 14.2% and 12.7% respectively. The flats sales increased significantly, pulled up by deals on existing homes (up 22.6%) as new unsubsidized properties lost on popularity (down 17% y-o-y).

If it comes to average prices, August-transferred houses cost 1.111 euros a square meter, showing an 8.6% contraction in comparison to the same month in 2013. The figure owes its negativity to single-family homes that plummeted 25.8%.

In turn, average value of flats climbed 0.4% y-o-y. Out of their total, existing properties averaged at 1.200 euros/sq m (up 0.8%), and new units at 1.475 euros/ sq m (up 2.3%).

Lending Reactivation

Mortgage market change over time portrays an improvement in non-seasonal loan granting, the Notaries point out. Specifically, home mortgage approvals jumped an overhelming 31.5% in August on the year-on-year basis. Apart from the acute increase, they turned out to be cheaper. Average amount lent post €103.630 (down 8.9% y-o-y).

Logically, return of lending brought about an advance in the percentage of mortgage-financed properties that climbed up to 38.8%. Besides, on average, the homes were 73.9% financed on their value.

 

Original article: El Mundo

Translation: AURA REE

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