Welcome to our first newsletter of 2022 with news about the Mortgage market in Spain! We hope you have all had a great start to the year and are looking forward to the year ahead. We are pleased to confirm that last year was another “Best Year Yet” at the Mortgage Direct headquarters. Our enquiries rose by 63% on 2020, and the average mortgage size by nearly 50% (to €324,000 for all mortgages and to €2,021,066 for those over €1m). This is very encouraging given the ongoing pandemic and we expect these figures to continue this year. This increased activity seems to be driven by clients wanting a lifestyle change, investors seeing Spain as a hot spot compared to other countries and borrowing continuing to be so cheap.
2021 Mortgage Market Review
Now has never been a better time to buy with a mortgage. Fixed and variable interest rates remain incredibly low (rates from 1% for foreign buyers), mortgage set up costs are lower than they have ever been (more banks are offering a 0% opening fee) and prices are still very reasonable. However it does seem that Spain’s low property prices may not last. Mark Stucklin from Spanish Property Insight (SPI) recently published an article featuring the SPI House Price Index Tracker which plots the six most-watched house indices on one chart (see below).
“Despite their different methodologies they all show Spanish house prices declining after the start of the coronavirus pandemic in 2020, and then recovering strongly in 2021.” – Mark Stucklin, Spanish Property Insight (SPI)
We recently met with a developer in Barcelona who strongly believes prices will rise due to the global shortage of building materials and subsequent price increase. These price rises at the construction end of the market have a trickledown effect throughout the whole property market. This was also mentioned recently by one of the main high street banks who foresee a 4% in price increases because of this.
In terms of the nationalities buying in Spain, Mark Stucklin adds “for the first time since records began, German buyers are now the biggest group of foreign property investors in Spain, according to the latest data from the Association of Spanish Land Registrars.” Mortgage Direct has also seen this increase in interest from Germany and we have just recruited another German speaker to assist in this market. We certainly see 2022 being another record for us as more clients take the plunge to buy in Spain.