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Spain Housing Slump Shows No Sign of Abating, Tourism Rises

New mortgages at lowest level in 8 years

Reuters publishes an interesting article on the Spanish Housing market today:

"The slump in Spain's property market showed no sign of improving in July as mortgage approvals fell to their lowest in at least eight years, though the beleaguered economy saw some respite from a solid tourist season, official data showed on Thursday.

mortgage - Spain Housing Slump Shows No Sign of Abating, Tourism Rises

The number of mortgages approved in Spain's once booming housing sector plunged 44.2 percent from a year earlier to 46,980 in July, the lowest since the data series began in 2003.

Analysts said the data reflected weak domestic confidence in the euro zone's fourth-biggest economy as well as banks' reluctance to lend.

Spain's decade-long housing boom burst in 2008, sending tremors through the economy and marking the onset of almost three years of recession or stagnation. The country has one of the highest levels of household debt in the euro zone, adding to the government's challenge as it tries to slash its deficit and ward off pressure from financial markets.

The construction sector was worth 10 percent of GDP in 2009, though this had slipped to 8.7 percent by the second quarter of this year, according to INE data.

The value of mortgages granted by Spanish banks plunged 48.3 percent in July year-on-year, to 5.8 billion euros ($7.9 billion), INE said, also the lowest level in eight years.

Home mortgages, excluding capital borrowed to mortgage other properties, fell 47 percent to 29,523 units".

Read complete article: reuters

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