Mortgages Diminish by 32.4% in January & Conclude 45 Months of Free Fall

28/03/2014 – Expansión

In January 17.464 mortgages were signed-up in property registry. The number is by 32.4% smaller than during the same month in 2013. According to the data published by the National Insitute of Statistics, an average amount granted declines by 1.3% in annual terms and settles at €101.628.  In turn, year-on-year information proves reduction by 33.3% to nearly €1.8 billion.

In year-on-year understanding, the decline in January embraces 45 months of continuous shrinkage and appreciates by 2 points since December when the mortgage signing showed a 30% drop-off.

However, looking closely at monthly scores one may notice a positive tendency. Namely, in January mortgages climbed by 41.6% in regard to December and marked the second consecutive month of growth since 2010. Also in the same dimension, the amount borrowed for houses went up by 41.8%.

Andalusia, Catalonia & Madrid Lead in Rankings

The autonomous communities that registered the highest number of signed mortgages in January were: Andalusia (3.169), Catalonia (2.751) and Madrid (2.620). All the communities underscored in comparison to 2013, except for Navarre that appreciated by 16.2% and reached 451 mortgages.

The most acute decline in year-on-year terms hit Cantabria (-59.1%) and Aragón (-54.9%). In turn, the biggest amounts were granted in the Community of Madrid (€390.6 million), Catalonia (€319.5 million) and Andalusia (€265.9 million).

Manuel Gandarias from the portal points out that (…) “still it is too soon to judge effects of credit granting re-taken by banks at the end of 2013.”

(…) Beatriz Toribio, running Research department at agrees with Gandarias and adds that “in spite of slight revival in mortgage signing in monthly terms, the January data raises concern if we take into account that banks are again offering mortgages on much more attractive conditions than a year ago.”

(…) On the other hand, as Toribio highlights, if we juxtapose mortgage signing (17.464) and property transaction (30.659) numbers, it seems clear that in January purchasers did not need any financing and most of houses were paid in cash. (…).

The cancellation of the property purchase tax relief in December 2012 also influences the numbers. (…) Another meaningful change is that paid-off mortgage volume (25.953, by 5% more than a year before and by 28% more that a month before) continues on higher levels than new mortgage signing (17.464) due to ongoing deleveraging process.



Original article: Expansión (M. Castillo)

Translation: AURA REE