House sales rise in line with Mortgages increasing in Spain

INE data

The INE in Spain published the transfer of property rights data for June yesterday.

The data taken from land registry shows that across all transfers of properties there was a significant rise when compared to June of last year. Buying in Spain for many years in the doldrums is now motoring ahead.

Resales and new builds

The sale of dwellings, one of the most important sectors was up 17% with total sales exceeding 30k thousand. Of the sale of homes 21.7% were new builds and 78.3% were resales. Developers continue to have a hard time in the market place with most buyers seeing resales as providing better value for money. 

Whilst sales of new builds were up by slightly on May of this year in total year on year they were down 30.6% whilst the sale of used homes were up year on year by 44.5%.

Increasing sales

With an increase of 3.8% over May of this year June 2015 was the first June in over 5 years to show positive growth between the two months.

International Mortgage Solutions SL who have operated in Spain since 2002 supported the data stating that May and June of 2015 were the best two months for loan completions in over 7 years and both months were up over 70% on the previuos year.

By Region

Regions most attractive to non resident buyers all had the highest absolute level of sales, some of the highest percentage increases and the most sales per 1000 registered residents, supporting the fact that foriegn investment in holiday homes and houses in Spain is on the increase again.

Sales are being helped by a weak Euro, low Euribor rates, lower interest rates being charged by Spanish Banks and prices for houses appearing to be at the lowest they are likely to fall.

Read the full article :- House sales for Spain in June

Repossesions Spain

Foreclosures in Spain

Since 2013 the Bank of Spain as part of its regulatory role has required Spanish Banks report on the breakdown of default activity and the final result of any judicial actions taken.

The data is to help assess the human impact and finacial impact on both Banks and borrowers.

Driven by much crtisism of how evictions were being handled and the suicide of a number of home owners prior to enforcement agencies removing them from their homes the numbers show a stark difference in how many defaulting loans are ending up with enforced evictions.

By far now the trend is toward only taking over unoccupied property or ones where the mortgage holder in Spain has agreed to hand back the keys in full payment of the debt.

Types of action taken by Banks in Spain

Only 25 evictions where law enforcements were involved took place in 2014.

In comparision to 2013 repossesions continued to rise as a percenatge of all mortgage holders, but far more went down the "Dacion en Pago" route. Dacion en Pagos whilst meaning you lose your home is a much more long term reasonable solution as you do not continue to carry a debt that the Banks can pursue until paid in full.

There has been a change in recent years to the approach of Banks in Spain for those who are not paying a loan on their primary residence with many Banks now having a no forced eviction rule.

Second home owners

Second home owners like non resident buyers in Spain who have a Spanish Mortgage are likely however to find the lenders much less inclined to go down an agreed foreclosure route so court cation on failure to pay and a debt outstanding at th end of it is more likley for this type of borrower.

Read the full article.- Mortgage reposession data for Spain 2014

Spanish home loans increase again May

Land registry data

Data out today from the statistical office in Spain confirmed the data pusblished by the Notaries and shows Spanish home loans continue to rise year on year.

Total lending was up 7.3% over last year but 10.9% up for those relating to the purchase of homes in Spain.

Both numbers of and capital lent increased both year on year and month on month although the increase of May figures over Aprils of this year was the lowest for the last 5 years.

Variable rate product types made up over 90% of loans signed and the Euribor was the index used in more than 90% of all transactions.

Interest rates

The average interest rate was 11% down on that of last year but marginally up on April. The Euribor fell slightly in May so the higher average rate is due to higher margins charged by the Banks in the month of May. This will most likley be a blip as competition amongst Spanish Banks to secure resident loans remains high.

Regions

The Balearics and the Canaries against better than average perfromance in 2014 both lagged behind the trend of increases seen in other regions and only Asturias as a region is behind 2014 when considering the data for the year so far.

Net outflows for another month

Total number of home loans signed and registered were 19,732 in May but mortgages canceled for yet another consecutive month outstripped new loan deeds signed.

Cancellations totaled 24,433 meaning the overall book of home loans fell by 4,701 and over 1m of capital left the books yet again.

Read the full article:- Land registry lending statistics for Spain in May



 

Mortgages in Spain increase in May and House sales are up

Notaries in Spain

The Notaries council called Consejo General del Notariado publihsed last week the high level data for Mays mortgage completions and house sales in Spain.

Mortgage levels were up by 26.4% year on year and the average loan size rose 6%.

In total 14,213 new loans were granted.

House sales continued to rise up 8.4% but the average price continued to drop slightly.

Annually mortgages are now up 11.5% in 2015 over 2014 and the average loan amount has increased by 3.6%.

Spanish Banks

For the first 6 months of 2015 the Spanish Banks have continued to more aggresivley lend.

This desire to secure more mortgages has helped improve the terms and conditions not just for Spanish residents but also for non resident buyers.

Whilst variable rate remains the most widely offered option more and more lenders have looked to offer long term fixed rates allowing applicants to tie themsleves into competitive long term rates covering the whole of the mortgage term.

Fixed rates can be offered from as low as 1.99% for 20 years but as with all Spanish Loans a number of linked products have to be taken with the lender to secure the lowest possible rate. Direct bank staff are not always as good as they could be at explaining this preferring to focus on headline rates rather than the nitty gritty of obatining them.

Lending Criteria

Criterias continue to be maintained with lenders looking for mortgage applications to demonstrate the borrower is not utilizing in general more than 35% of their proven net incomes for the purpose of debt payments.

Borrowers who are company onwers and do not draw all the income they could each year still have some issues getting Spanish Banks to accept the higher possible incomes rather than those incomes shown on personal tax returns.

More and more lenders are willing to look at 70% loan to value rather than the more standard 60% but many will only do so on a case by case basis for those mortgages they deem to be of more significance to them, and from applicants who meet criteria easily.

Read the full article :-Mortgages in Spain 2015 market update

 

Property transfers in Spain

Mays property sales

Total property transfers in May despite positive noises coming out of Spain remained level with the same month of last year.

The data taken from Land Registry is not the most up to date reflection of what is happening at ground level as it takes 3 to 12 weeks for the registry office to process the file. This means the data can relate to property transfers from some months ago. This said it is relevant against its own reports which have always reflected actual sales but with a time lag.

Dwellings

Sales of actual homes performed a little better than the total transfer market which includes, commercial sales, donations, Inheritance and reposessions.

Sales of homes increased year on year, month on month and remains up for the whole of 2015 when assessed against 2014.

Mays sales are normally higher than Aprils so whilst the trend of increased sales continues the actual increase of May over April was actually the smallest seen for at least 5 years.

Types of property sales

Part of the potential slow down of growth seems to be linked to the dramatic fall off of the buying of new builds. This drop in new build sales may be because developers believing possibly too soon the crsis was over started to increase the prices they were asking for even on developmets  that had been built for sometime and sat empty often for years. A missjudgement of market conditions has had an impact on volume.

Tied into developers loans and with Spanish banks requiring the developer maintains mortgage payments until sale of the unit to a third party it might well be the case that we see discounts on new builds again as the year progresses.   

Regional sales

Regionally, of those areas most attractive to International buyers, Andalucia performed strongly up in all areas in terms of year on year, month on month and for the whole of 2015.

The Balearics which has seen high level of interest for mortgage applicants from overseas buyers in the last 12 months fell back in May and has had a couple of quiet months. The same is true of the Canaries but this has also been reflected in the number of people looking to secure a financial approval for a mortgage in Spain.

The rest of 2015

The Notaries have been reporting miuch higher buying activity along wityh higher activity on Spanish Bank loans so we should see this start to be reflected more significantly in the INE data over the next couple of months.

Read the full article : The transfer of property rights for Spain in May  

Aprils mortgage levels fall back from March

Loans made and capital lent

Data out in Spain last week showed a decrease in numbers of loans and capital lent when considered against the month of March.

Although a little disappointing this is the normal trend when looking at what happens  over an extended period of years. Only once in the last 5 years has Aprils mortgages in Spain been higher than in the March.

When considering numbers of loans and capital lent against the same month of the previous year the picture looked a little more rosy. Numbers of loans were up 21.4% at 18,857 but the avergae loan size only moved by 0.6% at 100.683.

Types of loans

Variable rate remained the type of loan by which most loans completed with a small increase ion those opting to take fixed rates. More Spanish Banks are offering fixed rates in the currnet market and with rates being low more applicants are choosing to fix for at least a period in time.

The interest rate for all loans including commercial lending was 3.16% in April but for home loans the average interest rate was 3.29%. This unusual statistic may suggest the Banks are keen on and focussed on getting credit to businesses.

Regional performance

Regionally Andalucia was yet again one of the top performers lending the most and showing a small increase over March. The Balearics was one of the few other regions that outperformed March figures.

Net outflows

Net outflows which slowed slightly in March raced away again with a much bigger gap between the amount of loans redeemed or cancelled against new loans constituted.

The data is taken from Land registry so a little behind the data taken at Notary and will relate to copmpletions from the months of February and March.

Read the full article:- Registered mortgages in Spain news for April

News for house sales and mortgages in Spain

Notary report for April

Data published yesterday by the Notaries in Spain suggested house sales increased in April but house prices fell back.

Data published monthly by the Notary Offices gives a more real time overveiw of what is happening in Spain as unlike the Statistical office who report from land registry. Mortgage and home completions take up to 3 months to make their way to Land Registry data so Aprils reporting could reflect what happened in January, February and March.

House sales

House sales climbed by 1.9% in the month of April according to those signed at Notary. Price per square meter however fell back by 3.9% to € 1,188 suggesting that a complete stabilization of house prices has not yet happened. According to the Notaries prices have now fallen 37% since the housing crisis and banking crisis started.

New lending

New loans were up in the month by 12.3% amd over 12k new loans were constituted within the month.

Average loan sizes were up 9.2% at € 122.119 reflecting a more positive risk approach by Spanish Banks.

Mortgages in Spain need a boost  in numbers to prevent the ongoing net outflow of loans to the Spanish Banks books. In an attempt to grow new and profitable business lenders have been much more aggresive in the market place and higher numbers of house sales if this can be sustained will help.

Read the full article :-Spanish Notaries Monthly Housing Report