This July the increase was 25% compared to the same month of the previous year, with the rehabilitation of buildings on the rise
Mortgage loans are rebounding in recent months coinciding with the relief of the covid-19 pandemic. Notaries point out that by the end of the year it will probably have reached the level of 2019, when the impact of the economic crisis of the last decade had already lessened. In July 2021, notaries certified 540 mortgage loans in the Tarragona area. It was 25% than those of July 2020, when there were 431. This July the fifth wave arrived in full, so that now, with a much lower incidence in terms of the pandemic, conditions are even better to expect an increase of mortgages the next few months. The sale of homes in the province also increased between July 2020 and 2021, but the increase was only 5%, going from 1,478 to 1,567. Thus, the demand for mortgage loans for the rehabilitation of buildings is on the rise.
For notaries, there are several reasons that explain the increase in mortgages in recent months. “Now there are many very interesting fixed rate bank mortgages, 1% or 2% and 20 or 30 years. At that time you will pay the same as now and that gives a lot of security “, argues for the Diari Més the Tarragona notary Miguel Roca, who adds that” that a few years ago was unthinkable. ” Thus, Roca points out that “it is cheaper than a rental.” This fact is being especially attractive to young people. The notary indicates that he is requesting mortgages “increasingly younger people, especially from the age of 30”, an age range that had not been seen since before the 2008 crisis, when the conditions to access loans were less strict than now. “Now you can get to pay between 300 and 500 euros a month for a mortgage when there are rents of 600”, Roca sentence, adding that the most recurrent thing in mortgaged young people is that “they have a fixed and stable job.”
Another reason why the increase in mortgage loans can be explained is “the positive economic dynamics when it seems that we are seeing the end of the pandemic,” says Roca. The notary specifies that “it has not been a crisis like the one in 2008, so strong, but more punctual, since most people have continued working and many sectors have not been greatly affected.” “People have jobs, they earn money and they can buy flats,” he says.
An important factor is also, and strictly linked to the pandemic, the need to change homes or renovate their interior. “With the covid, many people have realized that their house did not meet the necessary conditions and have decided to change to have a larger terrace, a garden or an office to telework. They are needs and tastes », Roca reviews. Along these lines, mortgages are not only being requested to buy homes, but rehabilitation is on the rise: “Companies don’t stop working.” Regarding the type of housing, mortgages are being made for all types: «A little bit of everything. Flats, single-family or semi-detached “, says Roca. Regarding the location in the city of Tarragona, the notary continues to point to a general increase in the number of mortgages.
A new bubble?
The growth in the number of mortgage loans does not make notaries suffer from the possibility of being before the beginning of a new real estate bubble. There will be no other. I discard it, ”Roca says. However, the notaries predict that by the end of this year the level of 2019 will have recovered, a year that, according to Roca, “we were in a good shopping moment.” “Now the trend is upward, I think we will get there”, predicts the notary.
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