Mortgage post-pandemic record

The number of mortgage loans for housing purchases in Spain increased by 41.2% year-on-year in June, reaching 37,961 — this is the highest growth since December 2019 and the highest figure since the pre-pandemic period (January 2020). Variable interest rates once again became preferable to fixed rates.

The volume of funds disbursed increased by 49%, with the average loan size amounting to 140,456 euros — the highest since February 2020, according to monthly mortgage data from the National Institute of Statistics (INE).

For the first six months of the year, the number of mortgage loans for property purchases grew by 11.2% year-on-year, while the volume of capital disbursed increased by 12%.

In June, there was a shift in borrower preferences: while from January to April fixed-rate mortgage loans predominated, in June variable-rate loans proved more in demand.

Thus, 38.8% of mortgage loans in June were issued at fixed rates — the lowest figure since February last year, while the share of variable-rate loans exceeded 60% for the second consecutive month.

By autonomous communities, Andalusia led in the number of mortgage loans in June with 7,853 registrations, followed by Madrid (7,372) and Catalonia (5,889).

Last year, notary and registrar activity was unusually low

The annual mortgage figure is “the best since the Covid-19 impact,” however it reflects a comparison with June 2020, when “the economic and social paralysis caused by the state of emergency still did not allow notaries and registrars to return to their usual work rhythm,” noted María Matos, director of the analytical department at Fotocasa.

“Deal closures in June exceeded the threshold of 35,000 signed mortgage loans for the third time this year. We have once again reached a record — the best figure since 2011, surpassed only in January 2020 (40,217 mortgage loans). This demonstrates the pandemic’s impact on mortgage deal growth to maximum volumes in a decade,” Matos added.

Less uncertainty

According to the expert, this data indicates reduced uncertainty: “the sector has recovered at very good rates after the paralysis caused by the pandemic. These are the best indicators since the recovery from the 2008 economic crisis. Current favorable conditions of low interest rates encourage many small investors to buy housing.”

Juan Villén, head of idealista/mortgages, notes that “the figures for mortgage loans registered in June continue the trend of previous months: very high volumes of new loans, supported by sustained real estate market growth and mortgage changes facilitated by low interest rates.” Rates, according to him, “will likely remain low until the end of the year.”

Source: https://www.expansion.com/economia/2021/08/27/61289683e5fdeafe648b45c4.html