The increase in home purchases without needing a mortgage in Spain

The purchase of a home without the need to access a mortgage loan continues to increase due to financial conditions. During the month of April they have signed 42,139 home sales, of which 25,945 were formalized through a mortgage, 61.5% of the totalaccording to the provisional data of the Real Estate Registry Statistics corresponding to the month of April 2023 of the College of Registrars analyzed by THE OBJECTIVE. While 16,194 were made without having to go to the bank to request a mortgage, that is, 38.5% of the total.

Data that contrasts with the figures from last year, when the proportion of citizens who could purchase a home without a mortgage was much lower. In April 2022, there were 46,163 home sales, of which 32,149 were formalized through a mortgage assuming 69.6% of the total. For his part, without a mortgage represented 30.3% of the total, 14,014 operations. That is, the purchase of a home without the need to ask the bank for money has increased 8.13% in one year.

Rate hike

The turn in the monetary policy of the European Central Bank with the rise in rates and the consequent tightening of access conditions and the increase in the cost of mortgage loans is behind this growthaccording to the experts consulted. A trend that has been increasing since the end of last year and can be seen both in the INE statistics and in the data from notaries and registrars. Although, as we tell in this newspaper, this current has been accentuated so far this year.

«Mortgage-financed sales continue to adjust downwards and given the macro-financial environment this trend is likely to persist and even intensify», assures Fernando Gutiérrez del Arroyo, analyst at the Statistical Information Center for Notaries, to THE OBJECTIVE. In fact, the data from notaries shows this reality in advance, since the sale completed before a notary can and usually takes time to be registered. That is why it appears with a certain offset in the registry statistics.

In addition, behind the increase in home purchases without a mortgage there is also the search for other alternative options to the bank such as savings or family loans. In other words, “citizens are looking for other ways to access a home to buy, without going through the banks, because the demand for purchases continues to be very high, despite the rate hikes,” say sources in the sector.

real estate moderation

In April, home sales fell significantly according to provisional data from the Real Estate Registry Statistics. From the 46,163 registrations of April 2022, it has risen to 42,139, which represents a reduction of more than 4,000 operations —a decrease of 8.7% over the same month of the previous year.

Stronger has been the collapse of mortgages on homes. In April, 25,945 operations were set up compared to 32,149 in the same month of the previous year, with some 6,200 fewer operations. From these data it can be extracted that the purchase and sale of housing increases more and more without the need to request financing from the bank.

By provinces, during April, the annual evolution of home sales, compared to the same month of the previous year, once again shows widespread declines in practically all communities except in Cantabria, Murcia and the Valencian Community.

Prices keep going up

While, House prices continue to rise, albeit more moderately confirming in May the stabilization trend of the residential market, with a price index that has registered a slight monthly rise of 0.3%, according to statistics Forget it IMIE General and Large Markets.

However, when analyzing the annual data from real estate portals, the price rise is much more bulky. In fact, according to data from the Real Estate Index photo house, the 17 communities increased the year-on-year price in May and in six communities it exceeded 10%. The greatest increases occurred in the Balearic Islands with 22.7%, Navarra with 20.2%, the Canary Islands with 17.9%, the Valencian Community with 12.0%, La Rioja with 10.5% and Andalusia with 10.2%. It is followed by the Region of Murcia with 9.3%, Catalonia with 6.4%, Cantabria with 5.4%, Aragon with 5.3%, Extremadura with 4.8%, Castilla-La Mancha with 4.8 %, Madrid with 4.7%, Galicia with 3.4%, Castilla y León with 3.0%, the Basque Country with 2.7% and Asturias with 2.3%.