INE: Mortgage Lending Reaches 5 Year High

28 November 2016 – Expansión

The month of September 2016 was the best for the residential mortgage market in the last five years. In total, lenders granted €3,018.5 million to borrwers to acquire homes, the best figure since 2011, which represents an annual increase of 12.5%, according to Spain’s National Institute of Statistics (INE).

In total, 26,667 mortgages were constituted over homes, up by 10% compared to September 2015. The average mortgage loan amounted to €113,193, up by 2.2% YoY. The value of mortgages constituted over urban properties in general amounted to €4,848.6 million, up by 3.7% compared with September 2015.

Interestingly, the percentage of fixed rate mortgages continued to gain in popularity during September; they accounted for 30% of all mortgage loans, almost one third of the market, compared with 28.3% in August (…).

These loans “are very attractive for potential house buyers given their current conditions and because they protect borrowers against possible increases in interest rates, such as the rise being considered by the ECB”, said Beatriz Toribio, Head of Research at Fotocasa.

The mortgage lending market has been on the road to recovery for more than two years now and that upwards trend was broken only in July 2016, when lending decreased by almost 15% YoY following a suspension in the inscription of some contracts for legal reasons.

Normalisation of the market

The Director of Research at, Manuel Gandarias, expects that, as we head towards year end, “mortgage lending will continue to grow as political stability takes hold and above all, the confidence and expectations of the most solvent buyers rises”. “We have have seen two months of adjusted increases in comparison with what the statistics had previously been showing”, he said. For Toribio, the data shows that “mortgage financing is consolidating as a result of low interest rates and the liquidity that exists in the market” and that “the real estate sector is moving towards normalisation”.

In addition, in her opinion, “in 2016, in addition to a significant increase in the number of loans, we have also seen growth in the average amount loaned as a result of the behaviour of prices, which are recovering in the large cities, such as in Madrid and Barcelona, as well as along certain parts of the Mediterranean Coast.

By autonomous region

By autonomous region, the areas that recorded the highest number of mortgages constituted over homes were: the Community of Madrid (5,086), Andalucía (4,788) and Cataluña (4,631).

Nevertheless, the regions that recorded the highest YoY variations in terms of the number of mortgages granted were: La Rioja, with an increase of 59.6%; the Canary Islands, with an increase of 45.2%; and Cantabria, with an increase of 38.5%.

Finally, the regions that lent the most capital for the constitution of mortgages over homes were Madrid (€772 million), Cataluña (€616 million) and Andalucía (€470.1 million).

Original story: Expansión (by J. M. L.)

Translation: Carmel Drake