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Property mortgage lending in Spain reached a 7-year high in September

Average loan capital climbed to its highest for almost a decade!

Figures published a few weeks ago showed that the number of residential properties bought and sold in Spain during September was 9.7 per cent higher than in the same month last year, and it therefore comes as no surprise that more data released this Friday morning reveal that at the same time the number of purchases financed by mortgage loans rose by 9.5 per cent.

What does catch the eye, though, is that the figure of 32,457 is the highest in any month since June 2011, while the total loan capital involved (4,146 million euros) has not been surpassed since March of the same year.

As a result, the average loan capital per mortgage during the month was 127,732 euros, 4.1 per cent higher than in September 2017 – the highest since December 2008! -, and with average interest rates of only 2.36 per cent on variable rate loans and 3.02 per cent on fixed rate repayment terms, as many as 40.1 per cent of all buyers opted for fixed rate terms.

The region-by-region breakdown shows that the most spectacular year-on-year increases in September were those recorded in La Rioja (67.4 per cent), Extremadura (34.4 per cent, the third consecutive rise of these dimensions) and Asturias (26.7 per cent), perhaps indicating that the market recovery is spreading to these parts of Spain, while there were falls in Aragón, Castilla y León and the Balearic and Canary Islands, where activity in the real estate market has slowed noticeably in recent months.

Of course, positive though these data for September are, more important is the longer-term picture, which shows that the surge in activity during the month was merely part of the on-going trend. In the first nine months of the year there were over 265,000 new mortgages registered on housing purchases, a rise of 9.7 per cent in comparison with the equivalent period in 2017, and over the last twelve months the figure stands at just over 335,000, representing a year-on-year rise of 7.8 per cent and an increase of 86 per cent over the last four and a half years!

However, there is a strong likelihood that a dent will be put into these figures by the data for October when they are released, due to the effect of the uncertainty over who should pay the judicial acts tax on new mortgages: eventually that debate was settled early in November by the national government with a modification of the law which states that the responsibility lies with the lending bank.

Source: Murcia Today

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