New Spanish mortgage approvals in February fell by 37% year on year, to 51,827, according to new figures from Spain’s National Institute of Statistics (INE). Falling mortgage approvals are a clear feature of a shrinking property market.
New Spanish mortgage approvals have been declining for 20 months, and have decline by more than 20% almost every month since January 2008.
Looking on the bright side, February’s decline in new mortgage approvals was smaller than January’s, when the slumped by 43.5% year on year.
The average value of new mortgages also fell in February compared to the same month last year, by 17% to 123,643 Euros. But on a monthly basis, the average mortgage value rose a fraction, by 1.3%, for the first time in 12 months. That may be an indicator that the property market is starting to find a floor, or it may just be a blip.
Interest rates on new mortgages rose, however, despite an extraordinary drop in base rates. The average rate on new mortgages, at 5.4%, was 5.9% higher than a year ago, despite the base rate falling from 4.349% to 2.135%.
It was also reported today in the Spanish press that Spain’s biggest real estate companies have a combined debt of 300,000 billion Euros.