Is there some positive news on the Spanish Mortgage front?


Data out today has shown an increase in January both in average loan size granted month on month and numbers of mortgages registered month on month in Spain. Whilst the numbers and average loan size from Dec 2012 to Jan 2013 have increased the overall year on year statistics however continue to drop.

Capital lent to dwellings was 2.169m which was a decrease on capital lent in January 2012 of minus 15.9%. However the month on month increase December to January was the highest it has been for 5 years.

It is not clear from the Data issued if the information is extracted from Land registry (so is a little historic) or from the Notary offices and extracted in the month the transaction happens. My view is the information is extracted when the mortgages are registered at Land registry which means in fact the transactions themselves probably happened in December. This would make far more sense of both the mortgage and house sale data that has been issued this month.

In December 2012 there was a rush of sales as people sought to beat the tax breaks that were due to finish including lower IVA on new properties and capital gain breaks on resales. This surge would explain far more the increases seen in January stats than a general improvement of the market. It is almost inconceivable that given the level of activity in December of actual completions at Notary that January’s sales topped this. It is certainly not what our figures would suggest.

To therefore get a real view of whether these seemingly positive month on month figures are showing a real slow but steady improvement and recovery  we need a few more months of sale and mortgage data under our belts. The average interest rate at which loans were secured dropped from 4.45% in December 2012 to 4.24% reflecting the Euribor decrease, average rates were slightly lower than the corresponding month in 2012.

 94.4% of all loans were granted on a variable rate.

Overall within the regions capital lent fell year on year more or less across the board with a couple of bright spots in Northern Spain and the Islands that the Moroccans claim are theirs all these areas  showing big increases but from a very small base. For another month running the amount of mortgages cancelled outstripped the amount of new loans granted   as Banks continued the ongoing trend of shrinking their book.

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