New house sale and loan data
On Monday the Notaries in Spain published their monthly data for house sales and Spanish mortgages.
The data published by the Notaries is taken from completions at Notary so is more live time then the National Statistical office who take their data from house sales and mortgages registered at land registry. As the registration process can take anything up to 3 months to complete the information from the statistical office is therefore somewhat historic and does not reflect what actually happened within the month they are reporting.
According to the Notary offices house sales were up in April by 1.9% from the previous year and showed a continuing stabilization of sale volumes throughout the start of 2015. This data also reflects more anecdotal reporting from Lawyers in Spain and real estate agents who saw a much more active Easter this year when it came to new buyers, particularly those from overseas. Spurred on by a weak Euro and a belief house prices have stabilized new buyers have been more prolific in recent months.
Despite previous data from other bodies that prices had started to increase the average price per square meter dropped in April by 3.9% according to the Notaries. Whilst perhaps not a reflection of the price per square meter one might pay for areas like Barcelona, Madrid and Marbella average price per square meter across the whole of Spain came in at € 1,188. This is some 37% down from the height and before the banking and housing crisis began.
Fueled by a belief that prices in Spain were rising many developers have increased prices on new builds, this is to the detriment of sales as resale’s now outstrip new builds by quite someway and private owners are still willing to be realistic on price to gain a sale.
New lending in Spain
Mortgages in Spain provided a rosier picture reflecting the Spanish Banks more aggressive approach to lending and the fact that all Banks have lending targets to meet this year.
In total 12,716 new loans were granted and signed in April this was up 12.3% on 2014.
The average loan size increased by 9.2% to € 122.119. The fact that loan sizes increased in a month when prices fell indicates the Banks are becoming more flexible in their approach to risk assessment and offering on average higher loan to values than we have seen in the last few years.
Bank loan criteria
For International buyers loan to values will not exceed 70% but as 2015 has progressed we have seen more and more Banks willing to consider an application, for the right client at 70%. Whilst only Sabadell and UCI publish a standard 70% loan other Banks will look at it on a case by case basis.
Caixa Bank will consider 70% as long as the loan is in Barcelona, Madrid or the Balearics. Bankinter, based on the overall quality of the client, will consider it for all areas and Targo Bank owned by Banco Popular can also review cases at this level.
There remains a preference with most Banks who are lending to non residents of Spain to maintain a 60% level but bit by bit this is being chipped away at as Banks try to beat the competition and secure quality new applicants over their counterparts.
Loan criterias in Spain
Little has changed with the Spanish banks when considering affordability ratios and it remains the case that self employed company owners who do not draw personally all the income they could will continue to struggle to get a loan unless the incomes are on a personal tax return.
Average debt to income ratios remain at around 35%.
For residents or taxpayers in Spain the ability to gain a loan is improving and rates and conditions will be tied into other linked products with the more products being contracted the better the conditions and the more flexible the Spanish Bank will be.