Mortgages for homes, businesses and Public Administration were valued at around 900,000 million euros at the end of November 2006. This figure is almost the same as Spain’s total GDP which is estimated to be 950,000 million euros. According to the latest figures by the Spanish Mortgages Association (Asociación Hipotecaria Española AHE), the total figure borrowed for mortgages in November rose to 896,042 million euros – 23.8% more than November 2005.
The AHE is expecting to see a rise of between 14% – 18% mortgages this year – less than 2006 which saw a rise of 23.8%. However this still means that the total borrowing for mortgages will reach a billion euros for the first time. The slowdown in mortgage lending is only affecting home mortgages. According to the Banco de España these only rose by 20.8% last October a figure which is below lending for other mortgages.
It is believed that the constant rise in house prices together with the rise in interest rates are putting off families from taking out new mortgages, although this doesn’t appear to have affected businesses from continuing to increase their credit from banks due to their increasing profits.
According to the AHE building societies and credit cooperatives continues lending money for mortgages at a rate higher than the banks. Building Societies in the month of November alone conceded double the number of mortgages lending 9,217 million euros as oppose to 4,735 million euros lent by the banks.
