Tag: Spanish Mortgage Association

AHE: Listed Mortgage Securities Tripled In Q1 2016

30 June 2016 – Expansión

In total, the volume of mortgage-backed securities admitted for listing during the first quarter of the year amounted to €22,514 million. According to the Spanish Mortgage Association (‘Asociación Hipotecaria Española’ or AHE), that figure represents a more than three-fold increase in the quantity recorded during the same period in 2015 (€6,300 million). Single mortgage-backed bonds maintained their weight over the total volume issued, accounting for around 53%. The issued volume of that instrument amounted to €7,143 million during the first quarter, up by 13.4% compared to a year earlier.

The issuance of securitisations backed by mortgages between January and March 2016 amounted to €15,371 million, up by 51.6%. The outstanding balance of mortgage securities at the end of March registered a decrease of 5.5% with respect to the same period last year.

Original story: Expansión

Translation: Carmel Drake

ST: Its Still Too “Early” To Talk About A “Complete Recovery”

21 April 2016 – El Economista

The CEO of ST Sociedad de Tasación, Juan Fernández-Aceytuno (pictured above), said on Tuesday that, despite the clear stability that we are seeing in terms of house prices, it is still “early” to talk about the “complete recovery and normalisation” of the market, and he warned that the recovery will only be an “objective” for as long as the net mortgage volume balance continues to decrease.

Those were the words of Fernández-Aceytuno during the opening session of the XXIII Meeting of the Finance Sector, an event organised by Deloitte, ABC and ST Sociedad de Tasación, at which he presented the five key indicators of the real estate sector.

Fernández-Aceytuno indicated that although there has been a double-digit increase in the number of appraisals commissioned by financial entities to support mortgage requests, the volume of mortgages granted in 2015 was “similar to the volume granted in 1998”, i.e. the lowest level in the series detailing mortgage activity prepared by the Spanish Mortgage Association.

Moreover, he said that in 2015, cement consumption amounted to 11.5 million tons, “similar to the levels seen in the 1930s and almost six times lower than the historical peak”.

“It would be interesting to validate and understand that real estate cycles in Spain are 16 years long, eight years of price and activity decreases, followed by eight years of rises”, said Fernández-Aceytuno, before going on to list the five key indicators for determining at which point we are in the cycle.

The five key indicators of the real estate sector

The first is the relationship between mortgages and transactions, regarding which he noted that during times of growth and recovery, the number of mortgages exceeds the number of transactions. “In Spain, that relationship was reversed in 2011; the good news is that since 2015, the number of mortgages granted has grown more quickly than the volume of house purchases”, he said.

Similarly, he indicated that the relationship between the percentage of appraisals commissioned by financial institutions for own assets and loan collateral has varied “significantly” from those commissioned by end clients to support new mortgage applications.

In terms of the creation of new households, Fernández-Aceytuno highlighted that, according to sources at La Caixa, almost 75,000 new households were created in Spain last year, which represents just 20% of the historical maximum. According to the Bank of Spain, the reference figure should amount to around 250,000 new households per year.

Similarly, he said that the New Home Census for 2016 compiled by ST-Sociedad de Tasación reported around 5,400 new homes for sale, compared with the 45,000 resulting from the calculations published by the Ministry of Development.

The variables that determine this difference are: the age of the home, its rental yield and the preference of property developers and banks to sell their homes in more favourable economic environments.

Finally, in terms of the evolution of outstanding mortgage balance, he said that currently the figure for the volume of loans being repaid exceeds the figure for the granting of new mortgages. “Although the latter increased at a higher rate in 2015, for as long as the net mortgage volume continues to decline, the recovery will just be a goal”.

Original story: El Economista

Translation: Carmel Drake

The AHE Urges Banks To Sell Their Remaining RE Assets

12 June 2015 – Expansión

The Spanish Mortgage Association (‘Asociación Hipotecaria Española’ or AHE), whose members are all banks, believes that the sector must sell off its real estate portfolio so that it can, progressively, focus its resources on its core banking activity once more. According to the economic report issued by the General Assembly of the AHE, the real estate market is now showing its first signs of revival and recovery, after its “significant adjustment” since 2007.

Meanwhile, the trade association also analyses whether the recovery in mortgage lending is happening in the right way, after some bankers raised concerns. In this regard, the AHE notes that the recovery in terms of mortgages is positive, and so too is the competition between entities, as that is leading to lower prices, which is in turn facilitating access to credit for families. Nevertheless, the association draws attention to the fact that “we cannot highlight enough the importance of properly assessing the risks in order to avoid malfunctions such as those experienced in recent years”.

The risks are particularly high during periods of extraordinary economic stimuli and/or when interest rate curves flatten out.

Original story: Expansión (by M.R.)

Translation: Carmel Drake