Spanish mortgages dropped 14.6% in March as lockdown bit
MADRID (Europe) – The number of mortgages taken out by Spaniards fell in March by 14.6% year-on-year, the government’s statistics body said on Wednesday, reflecting the hit from the coronavirus outbreak.
March’s 26,382 mortgages also represented a 26.8% decrease from February, the National Statistics Institute said.
One of the worst-hit nations in the world by the COVID-19 disease, Spain began a strict lockdown on March 14.
Mortgages in April, the first full month under lockdown, are likely to fall even more starkly. Analysts expect the near standstill in Spain’s economy to have a direct impact on banks’ mortgage books, which account for 40% of their credit portfolios or around 500 billion euros ($551 billion).
State-owned Bankia, one of the most-exposed lenders to mortgage loans, said during first quarter results new mortgage lending had fallen around 60% in April against March, though it expected a post-lockdown recovery.
Lockdown measures prevented individuals from conducting property visits, taking out mortgages, and relying on public notaries – who were only permitted to practise in emergency cases.
To mitigate the impact of the epidemic, which led to hundreds of thousands of job losses, the government approved mortgage holidays in March.
Spain’s economy relies heavily on both tourism and real estate activity, making it particularly vulnerable to the pandemic which has killed 27,117 people.
Property prices, however, held steady despite the economic ravages, with Spain’s largest property portal Idealista reporting a 0.5% rise in home prices in April.
Some in real estate expect strong demand to help recovery.
“There may be new demand due to confinement, given that many Spaniards realised their current property is not adapted to their needs,” said Anais Lopez, communications director for Fotocasa, Spain’s second-largest property portal, on Wednesday.
“This new demand could be very important to the recuperation of the housing sector in the next few months.”
(Photos syndicated via Reuters)