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Property mortgage lending reached 5-year high in January

Low interest rates continue to tempt buyers all over Spain

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There may be worries in Spain about the political stability of Mariano Rajoy’s minority government, about the potential effects of Brexit and about the level of national debt, but the residential property market appears to be unaffected as the first data regarding 2017 are published.

Just a couple of weeks ago it was reported that the number of homes bought and sold in January of this year was the highest in any month for four years, and recently the latest figures issued by the governments central statistics unit show that the property mortgage market is performing even more strongly. During January the total of 27,240 new mortgages registered was the highest in any month since January 2012, and the year-on-year increase of 16.9% shows that with interest rates continuing at record low levels there is no sign just yet of any slowdown in the sector.

One of the effects of the Euribor rate being in negative territory for so long is that fixed-rate repayment schedules are enjoying unaccustomed popularity, and during January these accounted for over a third of all new loans (36.8%). At the same time, the willingness to extend credit and to take it on was reflected by a 6.4% year-on-year rise in the average loan capital, which reached 112,844 euros.

More good news for the real estate sector is that mortgage activity was higher this January than in the first month of 2016 in all but one of Spain’s 17 regions, the only exception being a 2.2% fall in Castilla y Leon. Increases of over 30% are reported in the northern regions of Galicia, Cantabria and Asturias, and in the Balearic Islands.

The broader picture continues to show steady growth in property mortgage mending in Spain: the running twelve-monthly total is now 14.6% higher than it was a year ago at 285,000, and in current conditions there appears to be no reason to expect a downturn in the near future.

Source: Spanish News Today, March 2017

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