The most rapid rise in rates since the creation of the euro and the subsequent increase in the cost of credit to be able to access a home are strongly shaking the Spanish real estate market. So much so that the mortgage firm sank 25.7% in July (a total of 26,280 were established) and property purchases fell 18.4% in relation to the same month of the previous year to 57,255 operations. The data made public this Thursday by the General Council of Notaries confirms how this loss of activity is also reflected in the prices of apartments, which decrease on average by 4.6%, so that the square meter stands at 1,617 euros. The panorama they show coincides with the one drawn this week by the registrars.
This decrease is much more pronounced in the case of autonomies such as Castilla y León (-13%) and Extremadura (-9.5%). Since July last year, when the European Central Bank (ECB) announced the first increase in the price of money in years, reference rates have risen up to nine times in the Eurozone to stand at 4.25% -a waiting for what the entity’s Governing Council decides this Thursday.
This unprecedented escalation has affected both the Euribor, the main indicator of variable rate loans in our country, and the supply of fixed rate loans, which banks have been making more expensive. This has also reduced the average amount of mortgages that have been requested, which decreased by 12% year-on-year in July to 148,201 euros. In the seventh month of the year, the percentage of purchases that were made with bank financing stood at 45.9% and in this type of operations the amount of the mortgage loan represented on average 70.2% of the price.
They fall more than 30% in Castilla y León, Navarra and the Basque Country
Mortgages granted fell in all the autonomous communities, so that the smallest declines occurred in Cantabria (-13.4%), Extremadura (-17.7%), Castilla-La Mancha (-20.5%) and Madrid (-21.5%). In four other regions these were also below the average: Canary Islands (-22.4%), Murcia (-23.8%), Asturias (-24.7%) and Andalusia (-24.7%). Meanwhile, the collapse of loans to purchase housing was especially pronounced in Castilla y León (-33.2%), Navarra (-34.9%), the Basque Country (-32.8%), Galicia (-29, 8%), or Catalonia (-28.3%) and Aragon (-28.2%).
Regarding the purchases that were closed, there are only two autonomous regions in which the drop in operations is below double digits: Cantabria (-2%) and Castilla y León (-3.7%). In the rest, the declines are much larger and range from 10.6% in Castilla-La Mancha and La Rioja to 37.4% in the Canary Islands, the most affected by the storm that is brewing around the ‘brick’. Regarding prices, six communities see the cost of housing increase and in the remaining ones it decreases.
Due to the relevance of the increase, only the Balearic Islands (18.7%) registered a double-digit price increase, while in the Basque Country (7.1%), Valencian Community (4.9%), Navarra (3%), La Rioja (1%) and Catalonia (0.4%) properties became less expensive. On the other hand, prices fell sharply in Castilla y León (-13%), Extremadura (-9.5%) and Aragón (-9.0%), while they did so somewhat more gently in Galicia (-6 .6%), Asturias (-6.2%), Madrid (-3.8%), Canary Islands (-3.6%), Castilla-La Mancha (-2.2%), Andalusia (-0.6 %) and in Murcia and Cantabria, where they practically remained the same, declining only 0.1% in both cases.