No sign of distress in the Spanish property market as foreclosures decline to record low in the second quarter

Mortgage borrowers in Spain are having little trouble with higher interest rates if mortgage foreclosures are anything to go buy.

There were 3,677 mortgage foreclosure proceedings initiated in Q2, down 20pc on the same time last year, and the lowest number on record (data set going back to 2014) according to the latest figures from the National Institute of Statistics based on proceedings submitted to the Land Registry.

Well, not quite the lowest on record. The second quarter of 2020 was lower, but that was the lockdown period, so it doesn’t really count. The chart above illustrates the situation.

When it comes to new home foreclosures, however, it was the lowest period on record, with just 273 proceedings, compared to 546 in the lockdown period. The next chart shows that foreclosures on new homes are now almost insignificant.

Foreclosures declined in all areas of most interest to foreign investors, and most steeply in the Balearics (-65pc to just 47 cases) and Valencian region (-34pc).

Evictions carried out also declined heavily in Q2, down 33pc to 7,279 countrywide, according to the Judiciary’s governing council (CGPJ). 1,497 were the result of mortgage foreclosures and 5,306 were tenant or squatter evictions.

All the latest data on foreclosures and evictions suggests that Spanish households are not struggling to pay the rent or mortgage despite higher inflation and mortgage interest costs.