In a rather unexpected turn of events, given Spanish Banks have lending targets this year and are actively looking to lend, Aprils mortgage figures in Spain were down on the previous year.
April mortgage statistics
Overall lending in Spain dropped by 13.4% in comparison to the same month in April. The average loan size rose slightly from 94.5k in April 2013 to 100.4k in April 2014, but dropped from the previous 2 months when the average loan size hit 102k.
The accumulated drop in number of mortgages completed in the first 4 months of 2014 is now -21.9% the capital lent -20.7% and the average loan size up 1.5%.
Of the total mortgages granted, 41.3% were grated for residences, with the rest of the lending split between lending on land 12.2%, lending on commercial property 41.3%, and lending against Rustica buildings forming 5.35% of the capital lent.
Historic data between March to April figures
Over a five year period there has been a drop in the number of loans between the March and the April except for 2013 when there was an increase of 8.6%. In 2014 there has been a drop of 7.8% between numbers of mortgages constituted in March to the April.
Spanish Interest rates
The average interest rate dropped in April to 3.97% down from 4.04% in March and at 3.97% is the lowest interest rate for over 12 months. This indicates Banks in Spain are starting to drop margins above Euribor all be it at a very slow pace.
Completed mortgages by area
In the coastal areas which have been reporting an increase in property sales only the Balearics and Cataluña had an increase in the number of mortgages completed in the month up by 10.1%, and only the Canary Islands has a year on year increase.
Total numbers of mortgages completed for April were 15,326. By region Andalucía completed on the most loans at 2,760 but showed a decrease in the month of 10.3%. Total numbers of mortgages on residences canceled in the month was 22,547 yet another consecutive month of net outflows.
Conclusion and trends
Whilst the figures do make happy reading the longer term prognosis for the year is that numbers of mortgages in Spain will increase. Spanish Banks will find themselves at the half year well down on their budgets which could in turn encourage further flexibility on terms and conditions and a loosening of the tight criteria’s.
Activity levels at the front end have picked up in the last 6 to 8 weeks which will take some time to filter through to the official numbers because of both a lead lag on application to completion and again on the time it takes for the loan to be registered after completion.
Data published by the INE comes from land registry not the notary at completion so April’s figures probably reflect more accurately February/ March completions at Notary.