Increased lending activity helps house sales

INE and the Notaries reports

Data published by the INE in Spain and the Notaries continues to support the veiw that a slow but sustained recovery of the housing market is taking place in Spain.

House sales July

Julys house sales figures from the INE taken from land registry shows that sales were up 13.9% against July of last year.

Julys figures when compared to Junes were also up 7% so up month on month and year on year.

Private sales lead the way

The recovery is being pushed ahead by resales with new build figures remaining in the doldrums. New build sales continue to be down on the previous years and losing momentum month on month. This is partly due to pricing and the more positive manner in whuch private sellers are willing to negotiate.

June loan signings

The Notaries who are reporting against June but with figures taken from signing rather than land resgitry show that house sales were up 19.4%.

Mortgage lending was up 18.85 with 16,002 new loans signed in June and average loan amount up 4.8% at €121. 445.

Prices however dropped in June by 0.3% bringing the total decline in house prices sonce 2007 to 33.6% as an average across Spain. With Spanish Banks alowing an increase in loan amounts the suggestion is therefore that the average loan to value is increasing.

Read the full article:- Sale of homes and lending data Spain
 

Positive June lending for spain

Postive lending figures for June in Spain

Despite very positive figures in June for Spanish home loans this good news was tempered by the fact that the gap between new loans being constituted and loans being cancelled remains a porblem for the Spanish Banks.

Whilst 21,454 new home loans were up on the books in June and registered at land registry over 27,000 mortgages were redemmed or cancelled. After the boom of the first half of the decade and a lending market that was over exposed Spanish Banks looked to reduce their overall lending book.

This strategy was enhanced by increasing of margins and tightening of criteria and that along with the economic woes of Spain ensured that the mortgage loan book of all lenders decreased. considerably.

Spanish Banks want to increase lending

In the last few years the Banks have looked to stem this tide and have come back to the market with better mortgage rates and more pragmatic risk assessment. Despite all of this they seem unable to reverse the trend. A reducing mortgage book eventaully has a knock on affcet on the percenatge of bad loans against the entire lending book and will in the long term affect earnings.

Highlights for June data

For June numbers of new loans were up 8.7% on May, the first time in 5 years that June has outperformed the previous month. Capital lent increased by 31.1% against May, again for the first time in many years.

For the month of June loan numbers increased by 26.3% over June of last year and is up 21.1% anually accumalted for 2015.

Interest rates remain stable and floating rates the number one choice for borrowers.

Regional performance

Andalucia saw the most new loans in the month and was of those areas normally appealing to overseas buyers wishing to own in Spain the best performer in the Month.

Read the full article :- Despite increases in new Spanish mortgages net outflows remain in Spain

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