Despite reports earlier this year that the Spanish property market was going to slow down, figures released by the Spanish Mortgage Association (Asociación Hipotecaria Española) yesterday suggest that Spanish house-buyers have decided not to wait and see if prices become more stable or even come down before purchasing their new home. September registered a new high in terms of mortgage loans, and current figures put the growth of the mortgage market at 25.3%, its highest since 1996.
By the end of September 2004, Spanish families owed banks, savings banks and credit companies an total of 551.203 million euros in mortgage loans, that is 111.262 million euros more than last year. Experts predict that this trend will continue until the end of this year and will start to slow down during the first months of 2005.
Last week the Spanish Finance Minister, Pedro Solbes, announced reforms to enable borrowers to switch their mortgage from one bank to another without having to pays fees required until now.
These fees usually represent a percentage of the amount outstanding at the moment of the changeover and tends to disuade borrowers from choosing the best offer available if it means changing their mortgage to another bank. The new reform is expected to further increase competition in a market still dominated by the Spanish savings banks (cajas de ahorros), although Spain’s major banks have improved their share of the market in recent years.