Mortgage approvals increased in March
Following a great start to the year in terms of the number of property sales, mortgage statistics released today further demonstrate the improvements we are seeing in the Spanish property market.
Cinco Dias reported that 46.7% of property purchases in March required external financing, an increase of 61% from the low that was seen in 2013.
In 2007 the number of properties financed with a mortgage was over 60% but this amount fell by more than half in the years following the financial meltdown of 2008. Now the number has rebounded to almost half of all property sales.
On average, the mortgages were granted on 78.7% of the appraised value of the property, while the Bank of Spain sets the optimum level for value at 80%. Improved access to credit including low interest rates and more flexibility in the requirements goes some way to explain the increase in numbers, as well as lower property prices and increased supply.
In March the number of new mortgages approved was 29,642, representing an increase of 4.2% over the same period in the previous year, while the average amount mortgaged also increased, rising to 153,929 euros, a year-on-year increase of 6.2%.
Mortgage Reason
Of the approved loans, credit for the purchase of a residential property increased 16.5% on an annual basis. The average loan value for a residential purchase was 125,265 euros, representing a 2.7% increase over the same period last year. For other properties, the average value was 240,336 euros, a slight increase of 1% over the same period in 2015.
Mortgages approved for new construction showed growth of 2.3% with a total of 472 approved loans. The average amount of these loans was 277,491 euros, an annual increasse of 7%. Breaking this down further, we see the average amount loaned for housing construction increased by 13.7% to 227,583 euros.
Meanwhile, mortgages to finance business activities declined by 1.4% compared to last year, to reach 319 transactions. Despite the fall, the average amount of those loans increased by 11% to 588,090 euros.
This data goes a long way to confirming the recovery of the property market in Spain. Purchase numbers are up, construction is on the rise, and banks are lending again.
