Yesterday saw the monthly issue of mortgage data from the NIE in Spain.
May 2013 saw another drop in lending in both terms of capital lent and numbers of loans completed where lending related to dwellings. Whilst other loans is showing increases both month on month and year on year mortgages for residential property continues to slide.
The number of loans completed for dwellings was 18,420 a drop of 29% in comparison to May 2012.
The value of loans completed on dwellings dropped 32.9% compared with the same month the previous year.
Mortgages granted on urban dwellings made up 47.7% of the total loans completed with Rustic properties only making up 7.3% as Banks shy away from Country properties.
The number of mortgages completed in the month in comparison to the previous month of the past year showed the lowest level for 5 years, the capital lent also dropped by the highest level in 5 years.
The average interest rate by which loans were completed rose again in May 2013 to 4.72% and the average term was 20 years. Interest rates continue to rise as Spanish Banks increase margins above Euribor despite the low Euribor rates.
Unusually the Islands both the Canaries and the Balearics both showed significant drops in the number of mortgages granted in comparison to the previous year.
Across the board lending levels saw a small increase from April 2013 to May 2013 but not enough to change the year on year picture.
The amount of loans redeemed for yet another month was higher than the number of new loans completed showing a net outflow across the board.
Whilst Spain continues to show some signs of greenshoots on the economic side and Banks announcing they are back in profit the lending market remains under severe pressure.
DB withdrew from lending to anyone who did not earn their income in Euros at the beginning of the year and another lender Barclays Spain has withdrawn from supplying loans via the intermediary market and have made changes to their criteria in an effort to reduce new mortgage levels.