Spanish entities already lend an average of 128,456 euros for customers to acquire a home, according to the latest data from the third quarter of 2019. This figure “was not exceeded since the crisis broke out, back in 2008”, according to the latest Quarterly Bulletin published by the Spanish Hispotecaria Association (AHE). Consequently, the monthly loan installment has also increased to the average of 560.7 euros that mortgage holders are paying. The increase in both the borrowed capital and the monthly installment is in line with the rise in residential market prices.
However, in the course of 2019 and after four years of rise, real estate market prices have been moderating compared to the favorable records that had been occurring in the previous months as a result of the cooling of the economic activity that began to be noticed in the second quarter of last year.
The greater the amount borrowed and the greater the share, the greater the financial effort of the families for the purchase of housing. According to the AHE – whose reports are based on the loan portfolios of the 13 most important credit institutions in the country, which account for more than 90% of the national market – the average wage cost per worker is 1,877 euros per month, which multiplied by active people per household (1.25) puts the coefficient of financial effort to acquire a house at 25% “which means that The portfolio is within the limits of what experts recognize as the maximum recommended threshold, below one third of the household's net income. ”
The data of the average amount lent by the bank for mortgages is already the second that is achieved in a very short time the pre-crisis levels. The Spanish entities granted 3,708 million euros in consumer loans in November last year, according to the latest data from the Bank of Spain, a volume that was not reached since the first half of 2008.
Less signatures
In the third quarter of the year 105,208 mortgages were made for 16,562 million euros, according to the National Statistics Institute (INE). This means a 15.1% decline in the constitution of mortgages compared to the same quarter of 2018 and a decrease in borrowed capital of almost 7%. However, to fully appreciate the reason for the fall in mortgage sales, in which the slowdown in recent months may come into play, we must wait to know the data of the fourth quarter of last year because current can being distorted by the entry into force of the new June mortgage law, whose implementation caused delays in the signing of real estate loans due to the adaptation to the new protocols to follow.
The AHE, however, points out that this law “could be resulting in some tightening in the conditions of accessibility to credit.” The new real estate loan regulations require that entities carry out a thorough evaluation of the loan applicant to know the risks of the future borrower and offer him an adequate mortgage. Thus, banks have to examine the client's employment situation, the current income he has, the foreseeable over the life of the loan and those that will be received in retirement if the mortgage extends to this stage. The entities must also know the assets that the consumer has in property, savings, fixed expenses and other commitments already assumed.
The bank, forced to offer the price of mortgages without bonuses