Housing
Business 08/09/2021

Sharp rise in foreclosures in the second quarter

Proceedings linked to the housing of natural persons double pre-pandemic levels

2 min
Promotion of a mortgage in a bank branch.

BarcelonaFirst half of the year and Catalonia has already accumulated more than 3,100 foreclosures. This is the name given to the proceedings that banks in particular initiate when the person to whom they have lent money falls into arrears, among other possible defaults, and more than 50% of these have been claims linked to natural persons. These types of procedures, which may or may not end in eviction, have tripled between April and June this year compared to last year and are more than twice as high as in 2019, when the pandemic did not alter the statistics yet.

Thus, the 851 procedures recorded between April and June in Catalonia represent an increase of 216% compared to the same period a year ago. The same thing occurs, although on a smaller scale, if we compare foreclosures on the total number of properties, not just those for housing, where the difference is 80%. In both cases, however, the time with which it is compared is last year's period with the most stringent measures in place to contain the pandemic, which led to an almost total paralysis of the activity.

The point is that the upturn is equally considerable if we take into account the data from the second quarter of 2019, a year before covid appeared in Spain. Between March and June of that year Catalonia recorded a total of 365 foreclosures related to the residence of natural persons: the data of this last second quarter of the year is 133% higher than this figure.

This trend, on the other hand, is not replicated if we add up foreclosures on company-owned housing, which fell by 73% in the second quarter compared with two years ago. Nor is the phenomenon replicated if we look at all properties, and not only those intended for residential use, where well over half as many procedures are recorded as a year before the pandemic.

Among the communities with more procedures

The dynamics is similar in Spain as a whole, where foreclosures related to contracts with natural persons soared 242% in the second quarter of the year and doubled compared to before the pandemic. In addition, the data at the state level offer another indicator: in the first half of this year, there have been more foreclosures on primary residences than in the whole of 2019.

In the global data, in addition, Catalonia is one of the communities with more weight: it is the second that registers more of these foreclosures in properties destined for housing, after Andalusia, and the third if we observe what has happened in the total of assets. In this case the ranking is also lead by Andalusia, but the Valencian Country comes in second.

Adicae, the association of consumers and users of banking and financial products in general, has seized on these data to call for the approval of a two-year legal moratorium on foreclosures and repossessions. According to this entity, it is necessary to establish sufficiently long deadlines until the economic recovery arrives, especially because covid-19 has exposed an added volume of mortgages from the real estate bubble, they state in a communiqué, "which withstood the crisis of the last decade, but have not been able to withstand the current economic situation".

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