31st May INE data published
Yesterday the INE released the data relating to Spanish loans for the month of March
After a very positive start to the year with Januarys figures being up month on month and year on year the last two months are a little disappointing
In March the average loan size stayed very stable rising by a very small amount but in terms of numbers of new loans in Spain and capital lent the figures are not so rosy
In total the number of new contracts registered at land registry for the purpose of buying a home was 26,530. This is down 5.7% on the previous month of February which was already down on Januarys figures
The level of capital lent reached 3.156mk and was down 5.6% on February.
Loan levels drop last couple of months
Possibly more concerning is that against the same month of 2017 March also showed a decline dropping by 5.2% on numbers of new mortgages in Spain and by 0.8% in capital lent
Annually 2018 remains up across all reported areas due to high levels of activity in January most of which will have related to signings at Notary in the month of December
The numbers of new loans is up 5.6% annually, the level of capital lent for the purpose of buying a home is up 11.2% and the average loan size is up 5.3%.
Whilst the monthly numbers do not make happy reading it is true to say that in March 2017 the figures were very good being up 13.3% on February 2017 this was against the normal trends over the last 5 years where March is normally, as it is this year, below Februarys figures.
The issue seems to be two consecutive months of negative figures.
Lending for home loans percentage increases
So far in 2018 the percentage of lending that has been provided for the purpose of buying a home has recovered from last year when it dropped for many months to below 60% this year this recovered to above 60% and made up 63% in March.
Buyers going through the application process for loans has not increased but the balance of those looking for a home loan against commercial has changed.
Interest rates in Spain
Interest rates continued to nudge down slightly from 2.66% average in February to 2.62% in March.
Variable rates were an average of 2.45% down 23.8% on the same month of last year on an average 24 year term and fixed rates were an average of 3.11% down 6.9% on last year.
62.2% of all loans completed on a variable rate basis and 37.8% on a fixed rate. This split of variable to fixed rates as lending product type has stabilized at these levels after many months of fixed rate product take up increasing .
Regional variations
Regionally the key areas all saw a dip in March.
Andalusia was down 5.1%, the Balearics were down 19.7% but against low actual numbers of loans each month and Valencia was down 3.4%. Cataluna was one of very few regions showing any growth in the month.
Murcia who up until March was having a better year dropped by 28.3%.
Challenges for the Spanish Banks
After a couple of months of positive growth of the Banks in Spain lending books march had a large net outflow.
In March 26,350 new loans were registered but 29,899 were canceled or redeemed.
Only Madrid of all the regions actually added more loans than loans lost.
As of 1stJune 2018 Spain was pushed back into turmoil with the no confidence vote for Rajoy.
It will remain to be seen if this political unrest and instability will have an affect on house sales and mortgage levels.
