August house sales and lending

Notary reports

Each month the Notary offcies in Spain issue a report about the number of house sales and lending taken in Spain.This report is published around the 18th of each month and is published one month in arrears.The data reflects actual house sales signed and actual mortgages in Spain contracted within that Month.

INE reports

At the end of each month and two months in arrears the National office of Statistics in Spain publishes data for mortgage lending as extracted from Land Registry. This data relates to mortgages signed previously that have now bee registered on the deeds and may reflect signings from up to three months before. The information is more detailed but more historic than that provided by the Notary offices.

What do the reports tell us for 2015

Whilst both sets of reporting report at slighty different times and on a different basis both are showing that there is now an improvement year on year for both house sales and Spanish Mortgages.

House sales are up year on year although prices are still under pressure and dropping, all be it at a slower rate.

Mortgage completions are up year on year although in August the number of completions and capital lent dropped from July by 11.9%. This trend of lower completions July to August is normal but given the market has a lot of catching up to do one might have exoected to see normal trends reversed.

 

Lending volumes

All Spanish Banks are back in the lending game and competition is putting pressure on net earnings and yields, which is in turn being reflected in the share price of the Banks. Many challenges remain for Spanish banks who have to balance volume against profit and reductions in non performing loans, which is quickest resolved by increasing your book of performing loans.

Whilst the gap narrowed in August for yet another month more loans canceled than new loans added leaving another month of net outflows.

Read the full article:- Spanish housing and mortgage market recovery

Fixed rate product growth in Spain

Spanish Banks product offerings

Up until recently the mortgage product types available in Spain were predomintaley variable trackers tracking the 12 month Euribor.

Each month over 95% of all loans completed on this basis with only a handful of loans being completed on a fixed rate basis.

Fixed rates 

Most fixed rate offerings, when they were in fact offered by a bank, were much higher than the underlying variable rate, the process of obtaining them was difficult and they did not offer in either the medium or long term good value for money.

Things in the last few months have changed. Spanish Banks, or at least most of them, are now offering a wide range of fixed rate options ranging from mixed fixed rates, which have short term fixes of up to 5 years followed by a variable rate, to fill term fixes for as long as 30 years.

Why consider a fixed rate now

No longer are the fixed rates well above the variable but appear to offer long term stability at very low interest rates. Whilst because interest rates across the world are very low currently the fixed rates do not match current levels given rates are likley to rise across the years a loan is held the rates at an average of 3.25% for a full 20 years look to be a good bet.

Applying for a fixed rate

When applying for a fixed rate the application process remains more diffcult than for variable due to the fact you cannot be sure what rate finally you will be offered and what products you will have to contract with the Bank to achieve the rate required. Early repayment penalties are higher and should be taken into consideration when deciding on the right product for a client. Fixed rates are not right for everyone but where as they could not be consideered at all in Spain last year, now they should form part of any Spaish advisers product portfolio and best buy tables.

Read the full article.- Fixed rate mortgages in Spain

Spanish House transfers

Numbers of homes changing ownership 

August figures as issued by the INE in Spain show that the number of dwellings changing hands in Spain has increased year on year for another Month.

Sales of homes increased by over 20% against the same month of the previous year although dropped back in numbers form Julys figures. Whilst August sales were lower than Julys this is a normal trend. Only once in the last 5 years has August outsold the month of July.

Mortgage facilities

Spanish Banks have improved their loan offerings to non resident borrowers which is just as well as the housing recovery is being led by an increase in foreign buyers. This can be evidenced by the fact that regionally those with the highest absolute sales and those with the highest increases over last year are all the well known Holiday Home spots for those looking to own a property in Spain. 
Andalucia leads the way in terms of absolute numbres of homes sold with Mallorca and the Balearics leading the way in percenatge increase year on year.

Best Region

Murcia which up until now has lagged behind other areas due to a high level of vacant and surplus property, bank reposessions and falling prices bounced back in August and was up over 49% on the year before.

Resales

Resales outsold New Build sales and New Build sales continued to suffer as has been the case throughout 2015. Private sellers seem to be offering better value for money and in general due to valuation levels are easier to maximise loan facilities on.

Read the full article.- Property transfers in Spain