The granting of mortgages accumulated nine consecutive months of falls in October, and suffered a decline of 22.3% compared to the previous year, according to the INE, due to the rise in interest rates, at their highest since 2015, and the greater harshness of the banks, which look closely at clients to prevent them from becoming over-indebted. The fall affected all communities except Castilla-La Mancha and the Canary Islands, and exceeded 30% in Extremadura, Madrid, the Basque Country, Cantabria, Aragon, the Balearic Islands and Asturias.
According to the National Institute of Statistics, in October banks granted 31,921 mortgages on homes, with an average amount of 140,564 euros, 5.3% lower than last year. According to the General Council of the Official Associations of Real Estate Agents of Spain, this decline is due to the fact that “families now try to avoid financing by lowering their expectations and buying cheaper homes.”
In October, the group of financial entities lent 4,486.9 million euros for the purchase of a home, with an even greater annual decrease, of 26.4%. In the first ten months of the year, the accumulated fall in the granting of mortgages now reaches 17.7%, while the capital lent by financial entities has been reduced by 19.4%.
After the end of the real estate crisis, the granting of mortgages reached its maximum in May of last year, with 44,165 loans, and since September of last year it has been falling at double-digit rates, with the largest drops in September (29.6% ) and in August (22.7%).
Since September 2022, when rates began to rise, financial institutions only increased the granting of mortgages in January, although in the interannual rate it was an increase of a modest 2.9%. In the following months, the fall has accelerated, but experts predict that it has peaked: in the coming months the annual comparison will be with months in which the market had already fallen.
María Matos, director of studies at the Fotocasa portal, considered that the market has already entered a phase of “stability”, since mortgage concessions are at pre-pandemic levels, months in which they moved “between a range of 22,000 and 35,000 operations”. Javier Torres, director of mortgages at Clikalia, also considered that “we are facing stabilization at reasonable levels.”
For the General Council of the Official Associations of Real Estate Agents of Spain, the data reflect that “families delay the purchase of a home until they have more favorable financial conditions” since they are aware “that rates are at their lowest. high of the last 15 years and that they are going to go down again.”
Data from the INE indicate that the average interest rate on home mortgages was 3.32% in October, compared to the previous 3.26%, the highest value since December 2015, and the average concession term was 24 years. The average rate has increased by 1.18 points compared to last year and has now been above 3% for seven months. . 43.3% of home mortgages were established in October at a variable rate and 56.7% at a fixed rate. According to the Apis, “citizens have become afraid of the Euribor and prefer to take out fixed-rate mortgages rather than variable-rate mortgages, even if they pay more,” since in October the average interest rate at the beginning was 3.02% for mortgages. on variable rate homes and 3.57% for fixed rate homes.
By community, in October more loans were granted than last year in Castilla-La Mancha (2.5%) and the Canary Islands (1.5%). At the other extreme, the largest falls were recorded in Asturias (-44.1%), the Balearic Islands (-40%), Aragón (-39.9%), Cantabria (-38%), Euskadi (36.1%) , Madrid (-35.5%) and Extremadura (-31.6%). In Andalusia and Catalonia, two of the largest real estate markets in the country, the fall in mortgage granting was more moderate, 17.5% and 13.7%, respectively.
