The latest data on home sales reveal the marvelous enthusiasm of the market. According to the National Institute of Statistics, last February operations increased by 24% compared to the same month of 2021 Until we reach 53,623 transactions. Not only is this the best February in the last 14 years, but the twelve positive months that have accumulated since March of last year saw a 32.4% year-on-year increase. Many are wondering, given the huge dynamism that the real estate industry is wasting. On the brink of a new bubble like in 2008It’s a really tough time for both active professionals and Spanish households.
Although the shadow of a new disaster has appeared since the numbers started to break records, it was the Central Bank of Spain that brought the issue to the table recently. high exposure of banks to housing loans. The card issuer stated that “a certain possibility of transferring the effects of real estate imbalances in the euro area constitutes a suitable source of risk for the Spanish banking sector.” Again, excludes the pronunciation of these imbalances.
The fact is that one of the main causes of alarm is that organizations will once again be funding beyond 80% of the appraised value, which is not happening at this time. On the other hand, the solvency of all mortgage applicants continues to be examined in detail. No more than 30-35% of monthly income is used to pay the loan installment.. The families themselves have internalized the lesson and are aware of the wave of foreclosures and evictions leading to defaults.
Same way, The ratio between fixed and variable mortgages has made a big comeback, the fruit of seeking stability on behalf of buyers. Mortgage holders feared that Euribor, an excellent reference index for variable mortgages, would climb to July 2008 levels of 5.393%. While this scenario is illogical, Euribor has already left the negative zone it has been in since February 2016.. This upward trajectory, pushed by inflation, is still timid, but it’s already making mortgages more expensive.
Another point that makes us think that there is a so-called bubble is that despite the pandemic, most living space remained more expensive amid a health crisis. In fact, the relationship between the median house price and the Gross Disposable Income (GDI) per household, as measured by the salary per household, is growing. This indicator was at its historical maximum of 9.4 years in the third quarter of 2007. The latest data from the Bank of Spain, corresponding to the last quarter of 2021, was 8.3 years.. In any case, although the value of new and used homes in Spain has increased by 29.6% since the minimum recorded in 2015, as shown in the Tinsa April statistics, it continues to decline accumulated from the maximum of 22.7% in 2007.
Source: Informacion
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