Positive new lending figures for June
Data published for Spanish mortgages in June showed positive signs in terms of growth of loans for both the numbers of and capital lent for the purchase of dwellings.
Mortgage cancellations
Despite this positive trend more loans were cancelled in July than new loans constituted and as fast as the Spanish Banks seem to be increasing new lending, at the other end equally large numbers are being redeemed. There has been no month or year since the Banking crisis in Spain that the level of new loans has outstripped the level of cancellations.
Whilst for a number of years reducing exposure was the name of the game for the last couple of years banks have been looking to rebuild their book adding quality new business at higher margins to compensate for the high levels of arrears and defaulted loans, and the low margins by which loans were granted up until 2007. At present the tide does not seem to want to turn and could cause ongoing pressure on earnings in the longer term.
June lending key factors
In June the number of loans in Spain constituted for dwellings reached 21,454 this was up 26.3% on June of the previous year. Capital lent reached 2.2 million an increase of 31.7% over June of last year.
For year to date when comparing 2015 to 2104 the number of loans have risen by 21.1% and the level of capital lent has increased by 25.3%.
The average loan size in June 2015 was 103.626 which whilst up on June of last year was in line with May 2015.
The number of loans when looking at May 2015 against June 2015, rose by 8.7% this was a very positive sign as this is the first year in at least 5 years where numbers of loans have increased in the month of June over Mays completions. The normal trend is for June’s completions to be lower than Mays both in terms of numbers and capital lent.
57.4% of all capital lent within the month of June went for the purpose of buying a home.
Floating rates, fixed rates and average interest rates
93.2% of all loan types, despite a recent push from the Spanish Banks on fixed rates, completed on a variable floating rate. The 12 month Euribor was the index margins were fixed to in more than 91% of all new loans. The average interest rate, which has remained relatively stable for the last 12 months, was 3.35%, slightly down on May 2015, but slightly up on the lowest rates this year of 3.29%. In total interest rates have dropped by 13.7% from June of last year.
Andalucía leads the way
Andalucía stormed away in terms of numbers of new loans in June reaching 4.245 some 14.2% higher than May and up 39.8% on June of last year.
Other high spots for the month included the Balearics, which whilst at relatively small numbers, was up 31.7% above May and up 46.9% on June last year, and The Canaries which were up 38.3% on May this year and 48.3% on June of last year.
Of the areas of most interest to international home purchasers Cataluña was down 12.1% on the month of May and only up 10.7% on June of last year, Valencia was up 3.1% on May this year and 20.7% against June of last year, and Murcia was down 0.3% on Last month but up 30.9% on the year.
Redemptions
The number of new loans for residential housing reaching 21.454 did nothing to compensate for the 27,469 home loans canceled within the month. There does not even seem to be any reduction in the gap between the two new loans versus redemptions. The net outflow of over 5,000 loans in the month is no lower than it was a couple of years ago.