The property market plays a crucial role in any economy and with Spain being one of the member countries of the EU, its rapidly growing property market has attracted mixed opinions over the last few months.
This past April, mortgages granted by lending institutions and banks in the country rose 34% year-on-year to mark one of the sharpest spikes in recent years. Banks have continued to demonstrate leniency towards mortgage applicants, but this is perceived by economists as a precarious path to follow given the uncertainty surrounding the growth prospects of the Eurozone economy.
According to reports, the average mortgage value also rose by 9.1% to €123,256, while the amount of capital loaned increased by 46.5% to €3.54 billion. This has continued to push house prices higher this year with several coastal locations witnessing double-digit house price growths.
According to data published by Spain’s Statistical Office, much of this growth is driven by foreign demand, with the British being among the biggest group of buyers. The Belgian and Nordic markets are closely playing catch up with investors keen to invest in one of Europe’s top tourist destinations.
This type of growth has sparked some serious concerns with some already beginning to worry about a repeat of the boom and bust years of 2007 and 2008.
Nonetheless, some analysts have pointed out that since the double-digit housing price increments are limited to the hot locations like the Capital Madrid and Catalunya, there is nothing to worry about. For instance, according to data from Murcia Properties average home prices for the second quarter of 2018, have barely changed since last year with prices increasing by single-digit growth rates.
And according to Murcia Today, the number of sales and purchases finalized this past May increased by 7.7% from the same period last year while mortgages were up about 9%. Statistical data from other similar locations also shows that most places have only registered an average of 6.5% increase in house prices in the country.
