2023-06-29 03:55:16
The banks are more optimistic about the mortgage market thanks to the electoral advance and the expectations that the Prime Minister, Pedro Sánchez, will lose power. The entities hope that once the elections are over the business will recover againgiven that there is a demand bag that is waiting for the results of the elections which, with advance notice, will be held on July 23.
According to the financial sources consulted by THE OBJECTIVE, this recovery in activity will take place as long as the leader of the PP, Alberto Núñez Feijóo, arrives at Moncloa. His arrival, according to the same sources, will remain first uncertainty in the real estate sectorwhich has been punished with certain measures by the coalition government of the PSOE with Podemos in recent years, such as the new Housing Law
Even so, in banks take it for granted that sales will not reach 2022 levels this yearsince other negative factors must be taken into account, such as the rise in interest rates and uncertainty about the evolution of the economy and inflation, and which are compared with very high figures.
The collapse in mortgages is “surprised”
Before Sánchez announced the advance of the elections, some entities (BBVA and Caixabank) predicted a fall for the whole year in the commercialization of mortgages of between 25 and 35% for the current year. Now, the banks as a whole expect the decrease to be less than 10% again, although certain conditions must be met for this. One of them is that the political environment is clearer and, therefore, some instabilities that have been shadowing the market for a few months now are erased.
As officially explained by the Spanish Mortgage Association (AHE) in his latest report on the evolution of loans for the purchase of flats, «It is surprising that with economic activity responding well, although slowing down, the size of the contraction in activity is in the double digits». This, he adds,It leads us to think that there might be some wait-and-see behavior until the “political, economic and real estate picture is clearer.”».
This organization, of which the main banks in our country are members, explains that the formalization of new mortgages registered a decrease of 15% in the first quarter of 2023 in contrast to the 17% increase recorded in the same period of the previous year. “The contraction is more devastating if the volume of renegotiated operations is excluded to improve the original financing conditions,” he adds.
The bank considers that this collapse does not correspond to the strength of employment and GDP growth, despite the very negative situation due to the rise in inflation and the record rise in interest rates and, therefore, the Euribor, up to 4%. In April, according to the National Institute of Statistics (INE), the collapse in sales accelerated, since they fell by almost 19%.
«The rise in interest rates was expected to cool the market, but perhaps there are other elements that have also contributed to the fact that real estate activity has been weaker than expected in this first part of the yearsuch as a possible postponement of purchase decisions given the prospect that the horizon for residential prices and financial conditions will improve in the future, or that some investors were waiting to see how the political landscape is resolved in the next elections to take a position on the matter, “says the AHE.
It must be taken into account that the elections, in principle, were going to be held in December, hence the previous estimates were more catastrophic than at present regarding the evolution of the purchase of flats and, therefore, of the request and concession of mortgages.
The rise in the Euribor has led to higher early repayments of loans and cancellations now equal to new operations. But What is not having much acceptance despite the rate hit are the aid measures agreed between the Government and the banks last November. The data indicates that only about 15,000 mortgage holders have applied to take advantage of one of the initiatives available to alleviate their installments monthly, compared to the million that the Executive initially estimated.
These low requests will be analyzed this Thursday at the meeting held by the employers of the sector, AEB and CECA, with the Ministry of Economy. A meeting that Minister Nadia Calviño will take advantage of to demand that the banks raise the interest they offer for deposits, as she announced ten days ago.
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