The signing of mortgages grows and gains weight in the housing market

BarcelonaMortgage signings in Catalonia grew by 9.3% in May compared to the same period last year, according to data from the National Statistics Institute (INE) published this Monday. They gained prominence in a highly strained market and came to represent 84.4% of total operations.

While mortgages grew, home purchases fell by 5.6% year-on-year. According to the manager of the Chamber of Urban Property of Barcelona, Òscar Gorgues, "the key is to ask whether buyers and their needs have changed". "Those who buy an apartment to live in normally ask for a mortgage, while the investor asks for less financing or none at all," he explains.

Last May, loan operations accounted for nearly 72.9% of the total, but even so, if we look at the month-on-month evolution – since last April – mortgages are slightly declining: they were used in 85.2% of sales and in March, in 86.6%.

Between 2007 and 2012, the number of mortgages signed on housing exceeded that of purchases in all months because in many cases they were not used to buy the apartment, but rather the apartment served to obtain financing for another purpose. In contrast, from mid-2013 onwards, mortgages decreased to represent between 50% and 70% of sales. The weight of mortgages reached its lowest point in August 2013, when only 38.9% of real estate transactions were linked to one of these loans.

More money lent

In parallel, this May the capital lent in mortgage loans to the country as a whole increased by 21.94%, to 1,528.34 million euros. In fact, the average amount of each mortgage exceeded the threshold of 200,000 euros, the highest ever recorded in a May.

Gorgues argues that the increase in the volume of money lent "does not mean that the flat is more expensive" –which also– but rather that "the buyer needs more financing, because it is more finalistic". "It could indicate that there is another market configuration," he points out.

Housing is the primary concern of Catalans, according to the Centre d'Estudis d'Opinió (CEO). The high price and scarcity of supply are the focus of public discussion, while, in parallel, administrations and entities criticize the presence of large investors and vulture funds.

In the State as a whole, 0.09% fewer mortgages were signed. Catalonia was the third community where these operations increased the most, behind Navarra (33.52%) and the Canary Islands (16.52%). These are also the territories where the loan amount increased the most, by 46.26% in the Canary Islands and 31.31% in Navarra.