BarcelonaThe surge in the home sales market in Catalonia has encountered the usual slowdown in activity in August, which this year has broken a 14-month upward trend. However, the same has not been true for mortgage signings, which not only have seen a 15-month rise in growth but have also recorded their best growth in a single August since 2010.
two variables that have recently reflected the strong momentum experienced by the residential sector, which has recently reached—in the case of the second-hand market, the vast majority of transactions— the highest prices in the entire historical series in Spain –and it seems that Catalonia is at its doors.
However, for the first time in 14 months, there has been a mismatch between sales and mortgages, which have been registered highest levels in the last fifteen years in CataloniaThis slowdown in transactions, which in Catalonia resulted in a slight year-on-year drop of 0.6% in August, to 7,611 home sales, has not affected mortgage originations, which in August registered a 13.9% increase compared to the same month last year, to 5.
For the manager of the Barcelona Chamber of Urban Property, Òscar Gorgues, this slowdown in purchase and sale transactions is explained by the drop in activity in August, and he highlights that while mortgages are growing more than sales, the percentage of loans for home purchases increases, which, at 8%, is higher in August than a year ago. "In fact, the ratio we have between mortgages and sales in the province of Barcelona is 83.76%; this refutes the idea that investors are the home buyers; they seem to be finalists," explains Gorgues.
Gorgues also asserts that the current regulation of the rental market, which is influenced by measures such as price caps, is pushing the rental housing stock towards buying and selling.
The value of mortgages has skyrocketed.
Although the number of mortgage loans issued in August was 5,745 in Catalonia (up 13.9%), their total value stood at €1,084.5 million, 32.4% more than a year earlier. Therefore, the fact that the value of loans grew much more than the number of mortgages—which is explained by the current record-high price situation—means that the average value of each mortgage has also increased.
Specifically, the average mortgage granted in Catalonia in August was €188,785, 16.25% more than the same month last year. This increase is the largest recorded in August in the last 15 years, confirming the state of grace for mortgage loans.
"A trend that scares us"
For Trioteca CEO and co-founder Ricard Garriga, this increase in the average mortgage amount, which in Spain stood at 15.46% in August, where loans reached an average of €169,650, "is the most alarming figure of the month."
"We started the year with an average mortgage of €152,000, and in just eight months it has risen by 11.4%. It's a trend that scares us and that we see reflected in real time in Trioteca's daily data," warns Garriga regarding the figures for Spain as a whole, where the number in Spain rose 7.51% year-on-year, significantly below the 13.9% increase in Catalonia.
Bankinter believes there is "irrational" competition in the mortgage market.
Bankinter warned this Thursday that it perceives "irrational" competition in mortgages. "We've been growing quite well in mortgages. [...] But the competition is starting to become somewhat irrational. So we will be somewhat less active," stated the bank's CEO, Gloria Ortiz.
Despite this scenario, Ortiz ruled out entering into a mortgage price "war," especially with regard to acquiring new customers. During the presentation of quarterly results this Thursday, the bank's CEO warned that "prices are rising and rising, and there could begin to be affordability issues for average salaries," reports Núria Rius Montaner.