Spanish mortgage approvals rise at fastest rate for eight years

June saw Spanish mortgage approvals shoot up considerably when compared to last year

Official figures released by Spain’s National Statistics Institute (INE) this week have revealed that mortgage approvals in June rose 19 per cent year-on-year – the biggest monthly increase since March 2006.

Although overall mortgage approval numbers were some way short of the market’s peak in 2006 and 2007, the increase signals a slight cause for optimism for the Spanish property market.

The INE reports that 17,137 mortgages were approved in June, with the average loan amount rising 1.3 per cent to €98,582. In total, €10.7 billion in mortgage loans were signed off in June…

Sceptics will point out that June’s impressive mortgage turnaround does not necessarily indicate a new trend. Both April and May endured worse months this year than last year – at 13.4 per cent and 3.4 per cent respectively – but the data does suggest an easing of the situation.

Indeed, in isolation, June’s performance was one of the strongest upswings in mortgage approvals for more than eight years, and perhaps marks the end of a six month period of stagnant lending. Between January and the end of May this year, only 100,935 mortgages were greenlighted by Spanish banks. This figure was 14 per cent below last year, and the lowest since 2003.

During the boom years between 2005 and 2007, Spanish banks would regularly approve more than 100,000 mortgages every month – a stark contrast to today, but perhaps a sobering reminder that those crazy days are best left consigned to history.

Today, the Spanish property market is far more sensible, considered and cool. It still has the exceptional choice and quality that made it a world leader, but without the incredible price tags and unsustainable increases in value that was ultimately the boom’s undoing.