Mortgage Transactions Fell 32.7% in 2012

According to data from the National Statistics Institute published yesterday, only 274,715 mortgage loans in total, were signed for home purchases during the past year, which is 32.7% fewer than in 2011. This represents the largest drop in mortgage transactions since the bursting of the housing ‘bubble’ and stands far from the million mortgages that were approved during 2005 and 2006, when the number of new loans comfortably exceeded 100,000 in many of the months of those years.

This reduction is practically the same as the figure recorded in 2011, when data showed a slump of 32.6%, to 409,337 new mortgages. This drop in the number of home mortgages in 2012 adds to the declines recorded in the previous five years and is the sharpest since the crisis erupted. The 2012 figure exceeds the aforementioned fall of 2011, and the declines recorded in 2010 (-7%), 2009 (-22%), 2008 (-32%), and in 2007 (-6.7%).

According to the figures released by the National Statistics Institute, the average value of home mortgages fell by 7.8% in 2012, while the capital loaned reduced by 38% in the full year. According to the statistical agency’s data, in 2012 the number of mortgages on rural and urban properties (within the latter includes housing) fell by 29.5% compared to 2011.

The number of home mortgages stood at 17,577 in December, a drop of 27.8% over the same month of 2011. This December decrease, with which home mortgages accumulated 32 consecutive months of declines, is less pronounced than in November, when the number of home mortgages fell by more than 31%.

This December monthly total for home mortgages is the lowest for any month in the comparable time series, launched in 2003, and the third figure registered below 20,000. The average value of home mortgages reached 101,460 euros in December 2012, 3% less than the same month of 2011, while the capital loaned reduced by 29.9% to 1,783 million euros.

Month-on-month (December over November), mortgages on homes fell 8%, while borrowed capital fell by 11.3%. The monthly decline in residential mortgages is the least pronounced for the month of December since 2008, while the decline in borrowed capital is more moderate than in 2011 but higher than in 2010.

According to the agency’s data, during December of last year 28,573 mortgages were constituted on rural and urban properties (within the latter includes housing), which represents a decrease of 26.2% compared to the month of December 2011.

Andalusia Leads Activity

By region, El Mundo reported that those registering the highest number of home mortgages were Andalusia (3,032), Catalonia (2,550) and Madrid (2,544). All regions showed negative rates, year-on-year, except Aragon, which recorded an increase of 39.2%. The sharpest declines were those registered for Castilla-La Mancha (-43.4%) and Murcia (-42.2%).

The regions which borrowed most capital for home mortgages were Madrid (327.5 million euros), Catalonia (260.9 million euros) and Andalusia (260.6 million euros).