The Spanish mortgage market does not show any signs of recovery. The mortgage balance managed by banks, credit unions and financial institutions dropped by 12,9% last year, reaching 876.724 million Euros, according to the figures provided by the Spanish Mortgage Association.
The December figure has been accepted by the transfer of toxic assets from nationalized banks to the bad bank, as warned by the Bank of Spain several times. The regulator has calculated that this effect can be worth around 54000 million Euros. These credits have disappeared from the balances of the banks, although they continue existing in the balance of the bad bank.
Technically the bad bank is not a bank and therefore its loans disappear from the total amount. Anyhow, the bad bank only explains a part of the drop in December. In November, when the transfer of assets had not yet taken place, the annual drop of mortgages was around 10%. Banks have made the criteria stricter for the concession of mortgages, increasing as well the margin to be applied on the reference rate.
Meanwhile, the demand is not picking up, as confirmed by different surveys carried out by the Bank of Spain.