New mortgage lending in Spain is still very depressed, say the latest numbers from the National Institute of Statistics (INE). These figures are one of the few reliable housing market statistics we have, so it’s always worthwhile paying attention to what they have to say.

According to the latest figures, for December and therefore the whole of 2009, new mortgage lending fell again last year, by 22% in volume terms (to 653,173), and by 34% in value terms (to 76.8 billion Euros), as illustrated in the chart above. These are the lowest levels in both volume and value terms since the INE started publishing this data series in 2003.

The number of new mortgages signed have been falling now for 3 years, and the value of new mortgages has been falling even faster. That means there is less money around to spend on property, which puts downward pressure on prices.

The following table shows how mortgage lending has been changing in percentage terms over the last few years.

As you can see it has been falling in both volume and value for the last 3 years, though the rate of decline improved slightly in 2009. That means it is still falling heavily, just not by as much as last year.

You can also see that, over the last 2 years, new mortgage lending has been falling more in value terms than in volume terms. That means that the average mortgage value is also falling, as borrowers take out smaller mortgages. The average value of new mortgages last year was 117,688 Euros, down 16% on 2008.

Why are people taking out smaller mortgages? Firstly, because the banks have tightened up their lending criteria, and now demand bigger deposits. But also because Spanish property prices are falling, so borrowers don’t need such big mortgages as before.

Peak to trough, new mortgage lending is down 51% by volume, and 59% by value, compared to 2006, when the market peaked. That is a massive decline in the amount of money around chasing property.