Thursday, June 1, 2023

Mortgages accelerate their fall in Spain due to the inhumane rise in interest rates

The number of mortgages established in Spain’s homes last March showed a slight increase compared to February and perhaps a double-digit drop year-on-year, accelerating the drop registered in the previous month in the market, which is increasingly showing the effects of the dire monetary tightening in Europe.

According to data published on Friday by the National Institute of Statistics, in March 36,182 mortgages were signed, an increase of 0.8% per month and a drop of 15.7% compared to March last year, confirming the drop in early indicators. They are already sketching a year.

Industry experts agree when they state that the increase in the cost of spending by the European Central Bank in the fight against inflation has been the main factor behind the slowdown in the mortgage market, which started the year with positive data in January.

Idealista warn that this trend could continue in the coming months at least until the end of the summer, adding to the burden of regulatory uncertainty in the region.

“This explosive cocktail, together with the increase in income other than fixed income, means that many families and investors have decided to postpone their purchase decisions, waiting for a more positive scenario that we do not see coming in the short term; this year at least”, CEO of Idealista Hipotecas, Juan Villén he added.

However, from Fotocasa they highlight the strength of the Spanish market in the face of macroeconomic adversities, from the number of mortgages subscribed: “Things exceeding 35,000 mortgages fully bring us back to normality with the pre-pandemic levels of 2019. It returns to normality. These are still. very positive data that indicate the market mortgages continue to be firm and stable,” said Maria Matos, director of Fotocasa.

“At the moment (in March) the banks are still presented relatively fair but very variable because of the daily rise in the Euribor. At the moment, the average mortgage is close to 3%, so it continues to be good. opportunity for homebuyers, and the monthly figure is high” adds Fotocasa.

Matos indicates that, in any case, the foreseeable trend in the coming months is one of moderation in the scenario of economic contraction with the greatest benefit.

“This fall in high rates will cause a large number of citizens to moderate their desire to buy a house, due to the tightening of the possibility of conditions and an increase in the cost of mortgages, which will pay off the sale of houses at the end of the year.”

Nation World News Desk
Nation World News Desk
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