Euroresiuk

Spanish property market slide confirmed

25% drop in number of mortgages confirms problems in property market

Despite the government’s predictions of a smooth adjustment in the property market figures for property sales published today by the Spanish National Institute of Statistics (INE) tell a different story. These figures show that property sales have fallen by 27% compared to the same period last year.

Another indicator of the slow down in the Spanish property market is the 25% drop in the number of mortgages conceded. This drop of 25.71% was the biggest decrease since 2004. According to the INE not only fewer mortgages were conceded in January but also the total amount of capital lent by banks and building societies went down by 3.08%. The average amount lent was 142.793 euros.

Building societies conceded 58.5% of the total number of mortgages in January followed by banks at 31.4% and other financial entities at 10.1%. As far as the amount of capital lent by these building societies lent 54.

5% of the total followed by banks at 35.1% while other financial entities lent 10.4%.

The average interest rate for mortgages conceded by building societies was 5.09% over 26 years compared to the average interest rate for mortgages conceded by banks at 5.06% over 26 years. 98.3% of the mortgages conceded in January were variable compared to 1.7% which were fixed rate mortgages. 87.6% of the total number of mortgages conceded in January used the Euribor as the reference interest rate.

The sale of used housing fell by 35.6% while the sale of new housing also dropped by 14.6%. However, despite a drop in figures compared to a year ago the sale of new housing rose by 41.08% compared to figures for the previous month of December.
91.8% of property sales were for private housing which constitutes a drop of 26.7% over a twelve month period while the sale of subsidised housing fell by 30.

7% compared to figures for 2007.

The total number of rural and urban estates sold was 234.788 which is 15.3% less than a year ago. Although this figure was 37.8% more than for December 2007. However, despite this monthly increase figures show a fall in sales of 23.5% over the course of year.

The INE named Murcia as the community with the highest number of property sales per 100,000 inhabitants with 268 sales followed by the Rioja (258), Castilla-La Mancha (237), the Comunidad Valenciana (217), Cantabria (212) and Andalucia, with 200.

At the opposite end of the list was Galicia with the least sales per 100,000 inhabitants with 113 followed closely by Madrid (124), the Basque Country (129), Navarra (138), Catalonia (139), Asturias (150), Castilla y León (157), Extremadura (159) Aragón (167), Baleares (180) and the Canary Islands (190).