ARCHIVED - Property mortgage activity in Spain reaches post-pandemic high
The number of new mortgages registered in March was the fourth highest in a decade
It is only just over a year since most sectors of the Spanish economy entered a pandemic-induced slump, but it appears that the residential property market is already surging out of the crisis and is returning to health far more rapidly than might have been anticipated.
This impression was strengthened on Thursday by the publication of figures showing that the level of mortgage lending activity during March 2021 was not only 35 per cent higher than in the same month last year, but was also the highest since January 2020 and the fourth highest in the last decade. A total of 36,886 mortgages were registered against residential properties during the month, with an average loan capital of 137,729 euros, and year-on-year increases in the number of loans finalized were reported in all 17 of Spain’s regions other than La Rioja and Aragón.
Of course, there is still ground to be made up before it can be said that the market has returned to “normal”, as activity decreased markedly during the lockdowns of the last 14 months, and it is worth noting that the average interest rate on new mortgages, while remaining very low, has begun to rise slightly. During March the overall mean was 2.49 per cent, and despite interest rates being higher on fixed-rate loans at 2.75 per cent these accounted for 56.2 per cent of all new deals signed – the highest percentage on record.
It seems, then, that as the market reawakens, lending conditions in Spain will be slightly different from those which prevailed before the pandemic. Fixed-rate mortgages are now almost the norm, whereas a decade ago they were almost unheard of in this country, enabling purchasers to lock into the current borrowing conditions for the duration of their mortgage, an opportunity which could prove extremely advantageous if the Euribor base rate rises significantly.