2023-11-01 10:05:34
During the last 12 months there has been confirmed an increasing decrease in the percentage of homes purchased with a mortgage loan. According to him study carried out by UVE Ratingsbased on data from the National Statistics Institute (INE), 67% of transactions until August 2023 were signed with a mortgage, almost five points less than in the last previous year (72.1%) and falling since August 2020. In this period, almost 205,000 sales were carried out without a mortgage loan, highlighting the provinces of Alicante, Málaga, Valencia and Barcelona.
The number of homes bought without financing has grown in line with the rise in mortgage rates, stand out from the appraisal company. In their analysis, they have studied the number of transactions and mortgages accumulated in the last 12 months since August 2023, and previous, August 2022, 2021, 2020 and 2019.
In August 2020, mortgages fell 6.3% compared to those accumulated in August 2019, but in August 2021 they were already 5.4% higher than in 2019, and in August 2022, 26% higher. But in August 2023, although they were still 15% higher than those of August 2019, mortgages show a stronger fall compared to the previous year, of 8.6% year-on-year.
“It is worth noting the constant increase (as of 2020) in the number of transactions without mortgages, which grows as a percentage of the total and in absolute terms and which in annualized terms represents an increase of 35.3% in August 2023 over the figure for 2019”, comments the UVE Valaciones study.
In the last 12 months since August 2023 204,859 homes were purchased without a mortgageits highest number in the last five years at the national level, and which has been growing since the worst of the coronavirus pandemic emerged.
In Alicante, Málaga, Valencia you see more random purchases, in Ávila and Zamora, where they have more weight
From the analysis it is deduced that the percentage of purchases without financing is even more evident depending on the provinces. The areas with largest tourist component and the provinces of emptied Spain are those that present a higher percentage of purchases without financing: in Alicante (64.8%), Ávila (62.2%), Zamora (55.6%) cash purchases have great importance on the volume of operations. Also in Castellón (52.5%), Cuenca (51.1%), Lugo (50.9%) and Soria (50.2%), half of the housing transactions were made without a mortgage through the last 12 months.
If we continue looking at the relative weight, at the opposite pole, Madrid and the three Basque provinces are the provinces where houses are most often purchased with mortgage financing. In all four, purchases without mortgages represent less than 10% of total operations, where important markets also appear, such as Seville (1.7%) or Barcelona (16.7%).
But things change a little if we look at absolute terms of operations without financing. Alicante (33.477) leads clearly, ahead of Málaga (16,144), Valencia (13,859) and Barcelona (10,418). Between 5,000 and 10,000 instant purchases appear in Murcia (9,868), Madrid (6,716), Santa Cruz de Tenerife (5,968) or the Balearic Islands (5,439).
“In Madrid, Barcelona and Seville, almost all transactions are done with financing. In Valencia, until the end of 2022, the pattern was similar to that of the three previous provinces, but recently free purchases have increased greatly to the detriment of financed purchases. In Malaga, a high percentage of purchases without financing was already common, but it has recently increased to equal that of financed purchases. And in Alicante, since 2019 it has shown a tie between financed and unfinanced purchases, but for a year and a half the proportion of unfinanced purchases has continued to increase and more than doubles that of financed purchases,” the study confirms.
The home buyer has been divided into two: the one who needs financing and the one who does not.
Las conclusions of the report They reflect that the real estate market is still suffering the effects of the pandemic. After the stoppage of activity caused by confinement, the injections of money from the ECB have caused a considerable increase in inflation that has led the highest European economic organizations to raise interest rates to try to stop it. The rise in interest rates has reduced the purchasing capacity of buyers who purchase a home for their own use and that they are usually financed to do so, but the rise in inflation has put pressure on the increases housing prices and, above all, rents.
“The provinces in which the proportion of financed purchases is higher (Madrid, Barcelona, the Basque Country and Seville, mainly) are more likely to see purchase prices decrease. But Madrid, Barcelona, the Basque Country and Navarra show very low growth in transactions compared to 2019. What can save them from the drop in prices is that they are areas with a housing deficit,” he states. Germán Perez Barrio, president of UVE Valuations.
“In tourist areas with a high proportion of purchases without financing, it is very likely that prices will continue to rise. For those who are looking for a home for their own use in these areas and have to finance themselves, the situation will worsen with higher prices and lower purchasing power,” he adds.
Another conclusion is that the Rising rents have become an incentive for property owners, especially if they do not need financing to buy. And so, buyers have been divided into two: those who need financing and those who do not. The former have less purchasing capacity, the latter have not changed their capacity and see that the increase in rents makes their investment more profitable. This explains the divergent evolution of transactions with and without financing.
“Transactions without financing have increased in the last year and will probably continue to do so: those who can buy a home in cash do not suffer the effects of the rise in interest rates and their alternative investments are either less profitable or unsafe. Rising rents are an incentive to invest and to defend against inflation. Financed transactions tend to decrease due to the growing difficulties in paying mortgage payments,” concludes the president of UVE Valoraciones.
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