The bursting of the housing bubble during the last crisis has transformed the real estate market in countries that suffered the heaviest price of housing. In the years prior to the Great Recession, there was a relaxation of the financial conditions that allowed young people with low wages to mortgage in the very long term with the risk that this entails. The bursting of the bubble has had serious economic consequences that have changed the behaviour of banks and families. Now, the composition of mortgaged homes has changed: the profile is a person over 40 years old and has a high level of income. This transformation of the mortgaged has also occurred in countries that did not suffer the bubble, but for different reasons....continue reading "Who is mortgaged today? The transformation of the real estate market"
The number of court-ordered home evictions for non-payment of mortgages, rent or other legal reasons reached 67,189 last year, according to judicial statistics released on Friday.
The number of open cases – pending eviction requests – stood at 82,860, which is 9.8 percent fewer than the previous year, said the General Council of Judiciary (CGPJ) legal watchdog in its annual report.
Of the total number, 38 percent were due to non-payment of mortgages while 57 percent were for non-payment of rent. Another four percent were for other causes. The figures reflect an average of around 184 evictions per day in 2013.
A breakdown by regions shows that Catalonia had the most evictions last year (23.8 percent) followed by Valencia, Andalusia and Madrid.
...continue reading "Home evictions averaged 184 a day in Spain last year"
Spain’s mortgage market continues in the doldrums due to low demand because of rampant unemployment and stricter conditions imposed by the country’s banks.
According to figures released Thursday by the National Statistics Institute (INE), the number of home loans granted by banks in July fell 42.7 percent from a year earlier to 13,777, the lowest figure since the INE began the current statistical series in 1995. Home loans granted in June were down 42.2 percent at 14,053. Mortgages disbursed have now fallen for 39 months in a row.
The amount of capital lent by banks fell by 42.2 percent to 1.380 billion euros, with the average mortgage down 4.3 percent at 100,180 euros. House prices in some parts of the country have fallen by over 40 percent from their peaks around the end of 2007 and the start of 2008.
...continue reading "Mortgages granted in July drop to new record lows"
These days, with the crisis still raging, seven out of every 10 home purchases in Spain are paid in full. Credit has dried up, and most of those properties still being bought up are paid for with savings or donations from family members.
There is another explanation for all the upfront payments: the rise in foreign buyers, who now represent 17 percent of the total, according to figures from the Public Works Ministry. These international clients are paying with funds of their own or with bank loans secured in their own countries.
Before the real estate bubble burst, upfront purchases represented 37.3 percent of total sales, according to the Higher Council of Notaries. That rate has doubled, and in June it represented nearly 68.6 percent of all sales. A study by Pompeu Fabra University (UPF) shows that in the first quarter of 2013, just over 60 percent of transactions did not require a home loan.
...continue reading "Thanks to a fall in prices, many savers are opting to buy houses outright"
Home mortgages fell 47.1 per cent, 22 consecutive months of decline
The number of home mortgages fell 47.1 per cent in February over the same month last year. This is the biggest drop since the statistics published in 2004. With 26,415 credit arrangements, this indicator marks 22 consecutive months of decline year-on-year, according to data released on Tuesday from the National Statistics Institute.
The drop in the number of mortgages granted on residential property was 9.4 per cent compared to January. The average loan amount was 104,868 euros, which is 14.6 per cent less than a year ago and 2.2 per cent less than the previous month. Cancellation of mortgages fell by 16.6 per cent.
The decline in mortgages registered on a property (total loans including rural properties, urban farms and houses) was 42.4 per cent, and the average loan amount came to 112,179, which is 12.5 per cent less than the year before. Changes in mortgage registrations reached 32,588, an increase of 4.8 per cent.
Changes on Interest Rates
24.9 of mortgages changed their interest rates. The percentage of fixed-rate loans fell after the change in conditions (from 9.3 per cent to 4.1 per cent of the total) since most of these loans were referenced to a variable interest rate.
All communities in February showed negative year-on-year variations in the constitution of mortgages, especially La Rioja (-70.8 per cent). Basque Country registered the highest average amount mortgaged, with 169,482 euros, followed by Madrid (153,671 euros).