this covid-19 did not discriminate when it came to spreading, but it was ruthless economic impact yes he did poor and rich. This is what evolution has shown mortgage loan During the pandemic, according to the latest financial stability report Bank of Spain. Mortgage-paying households before the health crisis in the clear since then in a generalized manner, but to a greater extent in municipalities lower income levels. On the other hand, the increase in these loans in households that were not previously mortgaged, high income areas.
It may seem that rising debt in the midst of a pandemic is a symptom of financial difficulties, but this is not the case. As a recent report BBVA ResearchThe strong increase (38.4%) in house sales in 2021, which continued in the first months of this year, was largely due to the preference of families. larger residences and with spaces clean Airthe “growing attractiveness” of housing as an investment, and accumulated savings during incarceration. All this in context low interest rates and therefore “favorable conditions” for borrowing. It seems that many households who can afford it have it. bought better houses live or earn rental income, and those with low purchasing power reduce your debt To deal with the economic blow of the pandemic.
municipal differences
Comprehensive analysis of the Bank of Spain supports this. Thus, Spanish families increased his debts mortgage (mainly for the purchase of a house, but also for other purposes, such as the purchase of other types of real estate) 0.17% Between 2019 and 2021, 514,676 million. But with big differences. Except for the little ones 3,314 municipalities with lower income mortgage debt of the country (8953 euros of average annual net income) 2.05% drop. It also fell 1.26%. 3,066 towns With an average income of 10,809 euros and 0.11% 2,076 Average income of 12,270 euros.
Against this, 1,454 municipalities mortgage balance with an average income of 13,951 euros rose 0.6%. However, the biggest contributors to global growth were households. 897 richest population (18,462 euros income, 106% more than those in the lowest bracket) as they increase their mortgage debt 3.65%. All this has implications positive for banks and financial stability. “These developments, average portfolio quality Since the beginning of the pandemic, the mortgage of banking institutions would have improved,” the Bank of Spain report underlines.
ie percentage distressed home loans stood together 8.58% at the end of last year (4.16%) guilt and at 4.42% private surveillance due to the high risk of default). However, the rate noticeably higher in three departments of municipalities low rents more than the two segments of the high-income population (6.84% and 5.28%) who reduced their mortgage debt (12.32%, 10.08% and 8.61%). To the extent that the latter increases its debt and the former reduces its debt, risk of losing it is less to stop charging for assets.
social problem
The development of the mortgage balance also confirms, in any case, an increased growth. housing access problem In the country for years This shows that Price:%s houses have become more expensive 39.3% since 2015in front of 5.6% rising on average fees During this period, according to data from a report by the Green Building Council Spain (GBCe). The situation is logically worse for lower-paid and lower-saving households, as their behavior during the two main years of the pandemic shows.
And there are no signs of improvement in the short term. BBVA Research predicts housing prices will fall They will increase by 5% in 2022 and 5.8% in 2023 as a result of the recovery in demand and inflation. In his opinion, raise rate interest rate of the European Central Bank (ECB) “It won’t have a big impact on the mortgage effort” What should households do? But yeah, as long as they can handle it “barrier to entry”that is, having enough savings to pay about 20% of the property’s value. It’s an increasingly difficult thing for the lowest income earners.