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Mortgage Approval Soars Up 29% in July

26/09/2014 – Expansion

The real estate sector in Spain is getting back to its feet. Next positive data comes from the mortgage signing area, proving that throughout the month of July, 28.8% loans more were approved by banks, totalling at 18.107 contracts.

The information has been published by the Spanish Statistics Office and it has been based on deeds sealed in prevous months.

Average mortgaged amount showed €100.866, meaning a 0.3% fall, whereas all mortgages approved during that month added up to around €1.82 billion, posting a staggering 28.5% year-on-year upsurge.

Experts remark that the 2014 data has been so far very positive due to the exceptional recovery speed taken by Spain and the fact that 2013 was pretty bad in housing terms. However, they expect major movements at the end of the year as new taxation regulations, which will be cumbersome for home vendors, is bound to come into force in 2015.

If the figures analyzed month-on-month (i.e. July over June), mortgages for home purchase increased by 5.7%, performing best in the last five years. The lent equity grew by 8.1%, representing the highest monthly score since 2010.

However, in the first seven months of 2014, the number of mortgage-tied dwellings shrank by 9.4% in comparison with the same period of time a year earlier, moreover marking an 8.2% decline in the total principal amount and a 1.3% rise in an average mortgage loan.

Most Mortgages Approved in Andalusia

By Spanish regions, in July, banks borrowed most intensively for property purchase in Andalusia (3.324 contracts), Madrid (3.247) and Catalonia (2.878).

Two regions registered less mortgages signed year-on-year in July: Castille and Leon (-11.7%) and Galicia (-0.6%), whereas the approval shot up in Asturias (+114.9%), the Canaries (+72.7%) and Cantabria (+64.8%).

In turn, most equity was lent in Madrid (€442.1 million), Catalonia (€325.5 million) and Andalusia (€281.9 million).

Interest Rate

Variable interest rate was applied on 93.8% of all July mortgages, while fixed rate on 6.2% of them. Euribor was picked the benchmark in 87% of variable rate contracts.

 

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

Translation: AURA REE