After the good results in the first two quarters, the outlook is no longer encouraging for the real estate market and there is one more factor contributing to the decline in sales operations. And Euribor’s upward trend accelerated after the deadline in July, causing a significant increase in mortgage prices. Thus, the receipt an average loan cost 110 euros per monthA situation that can have a deterrent effect for those planning to buy a house.
The 12-month Euribor, which is the benchmark for most mortgages, came in at around 1.3%. Highest number since 2012. The upward trend, which started with the European Central Bank’s approval of the first interest rate hike after eleven years, regained momentum after a few days of easing in July. With these increases, the indicator’s monthly average is close to 1.1%, which is more than one-tenth higher than recorded at the end of last month.
The result of these increases is that a 150,000 Euro loan with a 1% difference in Euribor and a variable interest rate that has to be reviewed the following month becomes 110 Euro more expensive per year if: It goes from 532 euros to 643. Extra cost of 1,332 Euro per year. And the problem is not there, because the problem also affects new loans, which can now be formalized, whose average interest rate rose to 1,986% in July, more than two-tenths from the previous month.
The Registrar’s report for the second quarter of this year highlights: 68.1% of new mortgage loans formalized with a fixed interest rate, compared to 31.39% for those who prefer variable interest. Average mortgage debt per home increased by 0.9% to 105,460 euros. Similarly, the average maturity of new loans decreased by 1.4% quarter-on-quarter to 23.1 years. Despite this, it is the third shortest medium term in Spain. In terms of accessibility, a slight decline was observed with mortgage payments averaging 486.9 euros per month; this represents a 1.8% quarter-on-quarter increase and a 26.6% percentage based on salary cost.
Total, 13,655 residential mortgages were registered in the April-June periodincreased by 8.5% compared to the first quarter. This figure places the Community in fourth place after Andalusia, Catalonia and Madrid. 54.8% of registered purchases had mortgage financing, the second lowest percentage in the entire country.
Alicante (Provia) Province Real Estate Supporters Association is of the opinion that the increase in the cost of housing loans will also be reflected in the buying and selling transactions. “They’ve been rising moderately so far, but there’s no doubt they’ll have an impact, more among domestic buyers than foreignThe general secretary of the organization, Jesualdo Ros. Antonio Fernández of Maisa Promociones also agrees with these assessments, confirming that “everything is getting mixed up, a more complex economic situation and rising interest rates”.