Santos González, president of the Spanish Mortgage Association (AHE), attended a congress on Housing: Current Issues in Alicante this Thursday. There he discussed the current market situation and offered insights during an interview.
Latest data shows a 29.6% drop in mortgage lending in September; how long might loans keep falling?
The decline is closely tied to rising interest rates, which naturally delay home purchases and mortgage applications. It’s important to note that the drop also reflects a strong statistical comparison with 2022, a standout year for the market. As long as rates stay elevated, buyers and borrowers will continue to pause. That means the trend could persist for several more months.
What are the predictions for future interest rate movements?
Predicting rates remains tricky because it hinges on actions by the European Central Bank. The Bank has signaled that peak rates may have been reached, though markets sometimes discount that stance. With recent inflation data showing improvement, it’s reasonable to expect inflation to ease over the next two to four months. A modest decline in rates could begin in the first half of the next year.
How will this affect the real estate market?
The market structure matters: it pivots on typical incomes, investor activity, and buyers with savings who seek apartments without salaries. Foreign buyers also contribute, often purchasing without mortgages, which sustains demand. The real challenge affects younger and lower-income buyers who are not currently active in the market.
Why did the Government’s Code of Good Practice for mortgage holders have low demand, and why did it fall short?
The Code did work. However, forecasts that it would affect a million people were overblown. What has been observed is that defaults do not rise, and banks can renegotiate with borrowers when needed.
This is what Alicante residents will pay with the new Euribor
Another major question is why delinquencies have not risen further and mortgages have not become more expensive?
Households are adjusting budgets. The typical buyer in the country is not highly vulnerable and often has some savings. This enables renegotiations and partial early repayments as families allocate funds to reduce mortgage balances. If monthly costs rise by 200 to 300 euros, spending on other items can be trimmed. In short, families are tightening belts and reorganizing spending, which helps keep delinquencies in check.