Mortgage approvals in Spain up 6.8% in August

Mortgage approvals increased in Spain in August, correlating with soaring transaction volumes.

Data released by the Spanish National Institute of Statistics this week shows that there were a total of 28,755 mortgage approvals countrywide during the month of August, representing a growth of 6.8% compared to the same month in 2017…

This percentage is the sum of incremental mortgage increases in all Spanish regions apart from one… the black sheep being the Balearic Islands, on this occasion, which registered a 4.9% drop.

The biggest contributors to the year-on-year growth in the eighth month were Extremadura, the Canary Islands and Cantabria, whose increases were 31%, 19.6% and 16.4%, respectively.

Statistics experts INE also published figures for the average mortgage amount applied for in the eighth month, which again was higher than last year. The median credit requested for buying a home in Spain was €122,424: almost a 10% increase interannually.

Delving deeper into summertime mortgage activity, there are some interesting month-on-previous-month statistics.

August compared to July was a mixed bag across all the Autonomous Communities, in the sense that monthly fluctuations were as accentuated as 32.2% in two regions (Extremadura posted an increase, while La Rioja’s approval numbers were down in August by the same proportion).

It is also rather intriguing to see that the regions of Madrid, Cataluña and Valencia, which usually churn out very impressive monthly residential property transaction statistics and often lead the way wherever real estate value is concerned, were down between 11% and 13.4% from July to August.

Perhaps it’s because most madrileños take the month of August off and no businesses are open? Maybe Catalans and Valencians were only doing tourism trade? Perhaps more buyers paid in cash?

Well, it is only when you dig a bit deeper into the INE’s stats that you realise these regions, despite the negative numbers, still got a lot of mortgages across the line. Specifically, the regions of Madrid and Cataluña were second and third in terms of the gross number of approvals signed in August with totals of 5,000 and 4,432 respectively.

And the first? With a whopping 5,984 mortgage agreements approved, the Costa del Sol’s home region, Andalucía, takes top spot. This total is 1.6% higher than in August last year and is, interestingly, an increase of 11.2% against the previous month (July 2018); evidencing its contrasting fortune compared to Madrid, Cataluña and Valencia, and showing that seasonal tendencies have not debilitated the Andalucía property market in 2018.