Mortgage lending slows growth but posts best April since 2010

BarcelonaThe number of mortgages signed in Catalonia fell for the first time in April, after three consecutive months of increases. However, the fourth month of this year has not been a bad month for the mortgage market, quite the opposite: so many mortgages have not been signed in April since 2010, when housing demand peaked at the bursting of the real estate bubble two years earlier.

This data comes at an important time for the housing market: while the price of apartments is at an all-time high, the cost of credit is going in the opposite direction, as a result of the European Central Bank's (ECB) interest rate reduction policy, which has now cut rates seven times in a row. although it points to a pause in the cuts.

"April was the month of Easter; therefore, it's normal that, as was the case with sales, they have dropped a little. The market is very dynamic, especially in Catalonia, and people are moving from renting to buying and selling; that's why they are so high and there is that level of financing. In fact, if you compare the number of sales with the number of mortgage loans," Òscar Gorgues, manager of the Barcelona Chamber of Urban Property, explains to ARA.

The amount of credit has skyrocketed

In fact, this would explain another relevant fact about the mortgage market this April: in Catalonia, the value of all these signed mortgages reached €1.121 billion, the highest figure since April 2004. Considering that 6,310 mortgages were signed this month,1 the average capital loaned, this is not only the highest value this year, but also the highest average price per mortgage loan in the last three years. This sustained increase in the value of signed mortgages would be explained by the upward trend in prices, which, in reaching the all-time high in the first quarter, registered a year-on-year increase of 11.7%, the largest increase recorded since 2007, the first year with available data.

These 6,310 mortgage loans signed in April in Catalonia represent 16.1% of the total for the entire state, where a total of 39,176 mortgages were signed for a total value of €6.106 billion; therefore, each loan had an average value of €155,000. This gap is explained by the fact that the average housing price in Catalonia is higher than in Spain. However, in both places, the cumulative number of mortgages from January to April of this year is much higher than the previous year: while there are 17.3% more in Spain, this difference is slightly higher in Catalonia, with a 20.4% increase compared to the first four months of last year. And the growth is even more exaggerated in the case of the value of these loans, which soared by 33.5% in Spain and 32.1% in Catalonia. Another indicator that housing prices are much higher than they were a year ago, and also that credit is significantly cheaper than it was in the first four months of last year.