Mortgage completions for dwellings in Spain saw another decline in September according to the INE who published their monthly report today.
September Mortgage Headlines in Spain
Overall numbers of new Spanish mortgages for dwellings dropped by a massive 30.9% in comparison to September last year and the amount of capital lent dropped by 34.7%.
Year on year numbers of mortgages lent against dwellings is down 28.1% in comparison to the same time in 2012 and capital lent is down 31.5%.
The average loan size for dwellings which was € 97.298 in September dropped by 5.5% in comparison to September 2012. This trend is possibly a reflection of both tighter loan to values and lower purchase prices. The average loan size including commercial lending was registered at € 115.368 a small increase of 5.1% in comparison to September last year.
Mortgages lent for the purchase of Spanish residential property made up 52.9% of the total capital loaned.
Are there any positive signs
Possibly the only positive from the figures is that the number of mortgages granted August to September showed the highest increase since 2009. Due however to a decreasing average loan size the capital lent August to September was one of the lowest monthly differences for the last 5 years.
Interest rates for September
Over 90% of all mortgages constituted in September were on a variable interest rate. This percentage shows there is little change in the Spanish banks preference for variable rather than fixed rate mortgages. The average interest rate at which loans were granted in September stood at 4.41% overall and 4.31% for dwellings this is a small decrease to the average rate for August and the lowest average rate since February of this year but above the average rate charged on mortgages completed in September 2012.
Subrogation of existing loans
The month of September saw another big decline in the amount of mortgages that were subrogated from existing owner to a new owner. Subrogation for debtors decreased by 54.7% in comparison to September of last year and year on year subrogation levels have fallen by 40.1%.
These numbers are a result of Spanish Banks choosing to lose the loan from their books rather than to keep the loan and allow the new owner to take it over. This is partially a reflection of Banks continuing to decrease their overall loan book and partly due to Banks not wanting to transfer loans to a new mortgagee at better conditions than those given on new loans granted.
Index used
Euribor remains the key index used by the banks forming some 88.3% of loans.
Regional data
Andalucía for another month was the region with the most amounts of new loans constituted showing a month on month increase of 17% but numbers for Andalucía, like most regions remain down year on year. Only the Canaries showed any positive increase in numbers of new loans increasing by 38.7% month on month and showing an overall yearly growth of 45.3%.
Total numbers of mortgages granted for dwellings was 14,856 in September and total mortgages redeemed against dwellings was 18,788 another consecutive month of redemptions outstripping new mortgages granted.
Will we see any positive changes in the last three months of 2013
It is unlikely any of the lending figures will improve in the last three months of year due to an upturn at the end of 2012 caused by an increase level of completions on residential properties as buyers sought to beat the tax increases which came into effect in January 2013.