New mortgage lending was up 7.1% in October, but the rate of growth has slowed down, reflecting a story seen in other figures.
There were 19,195 new mortgages signed in October, according to the latest figures from the National Institute of Statistics (INE).
Mortgages are the lifeblood of housing markets in advanced economies, so the level of new mortgage lending is keenly watched by market analysts. When mortgage lending expands, there is more money available for home buyers.
New mortgage lending has now expanded for 17 consecutive months, but the rate of growth in October was significantly lower than in previous months (see chart above), which might point to a slowdown in demand. Mortgage lending was up 20% in September, so growth of 7% in October looks weak in comparison, and represents the only month of single-digit growth in almost a year and a half. Other figures recently published, like the monthly housing market numbers from the notaries, also show the market cooling down in October.
That said, some regions enjoyed spectacular growth in new mortgage lending, led by the Balearics (+62%), the Basque Country (+44%) and the Canaries (+33%)
The average loan value in Spain in October was €111,711, up by 11% compared to the same time last year.
As the following chart makes clear, new mortgage lending is still a far cry from levels reached in the boom, down around 85%.
