Home value rises another 6.5% in April to 145,715 euros according to INE
The property market is heating up as warnings about rising interest rates have increased in recent weeks. In anticipation of an increase in the official money price by the European Central Bank (ECB), which is expected to take place in July, mortgage transactions are increasing precisely to avoid a rise in the Euribor, which has already started to rise after more than six years. has become positive below 0%.
Buyers want to avoid paying more interest on their loans, so the mortgage company accelerated 18% in March compared to the same month last year to add 43,378 loans. According to the INE, this is the highest single-month figure since February 2011, when Spain went through the previous economic crisis after the 2008 property bubble. With the advance in March, which is up more than three points from the number recorded in February was registered, the mortgage company has chained 13 months of consecutive year-over-year increases.
The aversion experienced by the real estate market is not only reflected in the mortgage deed, but also in the amount thereof. Because this data reflects how real estate values are rising, despite the doubts raised by the current crisis stemming from the war in Ukraine after the pandemic was over. The average amount of mortgages on residential properties rose 6.5% year-on-year to EUR 145,715 in the third month of the year, while debt capital increased by 25.6% to EUR 6,320.8 million, the highest figure since February 2020, just before the coronavirus was declared.
All analyzes indicate that mortgage signing is accelerating due to the expectation of higher interest rates. In March, the average rate for all residential mortgages was even 2.5%, with an average term of 25 years. A year ago it was 2.47%.
The Euribor is expected to close in May at 0.26%, compared to 0% where it closed in April. In just three months, the interbank indicator has risen practically one point, to -0.5% at the end of 2021. In addition, expectations remain optimistic (it traded at 0.35% this Thursday) with a view to the coming months.
In addition, in view of the fear of rising Euribor, fewer and fewer mortgages are being taken out at variable interest rates. In March, 27.3% of the loans were concluded with this modality, which implies periodic reviews (annual or semi-annual) depending on the evolution of the rates in the coming years. The average rate is 2.15%. The remaining 73% already have a fixed rate, maximum monthly subscription. That is, with the same interest rate for the entire term of the mortgage. Although it should also be taken into account that this modality already uses an interest rate of 2.68%.
The Euribor is in any case the rate to which the highest percentage of variable-rate mortgages relates, both before the change (65.8%) and afterwards (42.4%).
On the other hand, a total of 16,991 mortgages changed their terms in March, a figure 39.9% lower than the same month of 2021. Given the type of change in terms, there were 13,934 novations (or changes produced with the same financial entity) , with an annual decline of 41.4%.
The number of transactions that changed entities (subrogations on the creditor) was 2,451, 30.7% less than in March 2021. For its part, in 606 mortgages, the owner of the mortgaged asset (subrogations on the debtor) changed, 36, 5% less than a year earlier.
Of the 16,991 mortgages with changed conditions, 24.4% is the result of interest rate changes. After the change in terms and conditions, the percentage of fixed-rate mortgages increased from 22.9% to 48.4%, while that of floating-rate mortgages decreased from 75.8% to 48.9%.
According to the autonomous communities, Andalusia (8,966), Catalonia (7,545) and Madrid (7,308) were the ones who registered the highest number of mortgages on houses in March 2022. Similarly, Madrid (1,604.5 million euros), Catalonia (1,245.8 million) and Andalusia (1,097.4 million) were the regions where the most capital was lent for taking out mortgages on residential properties.
More home mortgages were signed in March than in the same month of 2021 in all communities, except in Galicia, where they fell by 3.9%. The largest increases occurred in La Rioja (+55.2%), Aragón (+51.4%), Canarias (+37.6%) and Balearic Islands (+36.8%), with the most moderate being registered in the Valencian Community (+2.6%) and Asturias (+3.9%).
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
