November 2023 Spanish Mortgage Figures
November 2023 Spanish mortgage figures did little lift poor end of year expectations
32.645 new loans were registered. This was up slightly on October. An increase of 2.3%. However against Nov 2022 down 19.1%. Leaving an annual decrease of 17.8%. 2023 over 2022.
Capital lent was 4.762mk plus 6.1% on October. Down 19.5% on same month of previous year. Also down annually by 19.4%.
The average loan size was € 145.994 up 3.8% on October. Reasonably steady at minus 0.5% over 2022 and down 2% annually to date.
Whats happening to Interest rates in Spain
Interest rates published by the INE still appear to have much link to reality. In November despite the 12 month Euribor being over 4% the average variable rate was reported at 3.03%. Average fixed 3.53%. Total average rate for home loans 3.27%.
46.8% of all new Mortgages in Spain completed on a variable rate basis. 53.2% on a fixed rate.
Against October the average rate dropped very slightly. According to the published figures it has risen from 2.66% same month of last year.
The ECB base rate was held in January. Some of the market may have expected a drop. Shorter term Euribors like the 1 month seem to reflect the fact that rates did not get down at the last meeting.
It is possible the 12 month Euribor will remain somewhat static for the foreseeable future. At least until a rate cut from ECB appears to be on the cards.
November 2023 Spanish Mortgage figures show activity is static
Activity remains slow. However new enquiries seem to be increasing a little on the non resident side. Possibly potential buyers becoming used to more historically average interest rates.
In 2002 4.95% was considered a good home loan rate in Spain. Less than places like the UK where mortgages were in the 6% region. Best buy loan tables today are lower than this.
The environment of below 2% rates was very recent and not sustainable.
However low interest rates can still affect the market. As you cannot port your Spanish Mortgage to another property. If you are on a fixed rate of 2.5% for full term its unlikely you will be eager to move and constitute a new loan. Given how much more they currently are. This can depress the selling market.
Spanish Banks not foreclosing
Mass repossessions as we saw during the late 90s and again from 2008 to 2015 do not appear to be happening.
New loan criteria is much tighter now for mortgages in Spain for non residents. The Spanish Banks are applying onerous stress test calculations. In the long term this will help the market conditions. However short term it is precluding a number of potential borrowers.
Bankinter one of Spains main lenders has also started applying some minimum mortgage amounts. Most lenders are veering away from the low end of the market. It is becoming increasingly difficult to mortgage purchases below 80k.
UCI another lender is reviewing its product offering. New terms and conditions will be published around the 9th of February. Its difficult to calculate if this will be a positive or negative. UCI only exists to lend. They have no other Banking facilities so it will be interesting to see what their plans are.