The number of signed mortgages continues to grow with each passing month. If the figure has been slowly increasing year after year during this last decade, in which it has been recovering from the ravages of the 2008 crisis, the demand for financing for the purchase of farms skyrocketed last year -despite the small slowdown that it suffered in 2020 due to the pandemic– achieving record figures since the bursting of the real estate bubble. In this sense, if the data for this first quarter of 2022 in Tarragona, 32% higher than those for the same period in 2021, continue the current trend, they could far exceed the spectacular numbers of last year.
There are many expert voices that assure that the foreseeable rise in interest rates is one of the causes that has caused mortgages constituted on homes to have skyrocketed during this beginning of 2022. It will be necessary to see then, when these interests are increased, if the demand for loans continues to grow or, on the contrary, stabilizes. On the other hand, notaries and real estate agents also point to the recovery of economic activity after the pandemic and the savings capacity of many families during this period as possible reasons for these high figures.
With the numbers of the National Institute of Statistics (INE) on the table, in this first quarter of the year 2,982 mortgages have already been signed in the province of Tarragona, well above the 2,260 that were signed during the first three months of 2021 – for the year as a whole they were 10,247–. On the other hand, and to get an idea of the trend of the last 20 years, in 2003, 28,795 mortgages were constituted throughout the demarcation. A figure that reached 45,436 in 2006, falling to 42,221 in 2007 and suffering a significant reduction from 2008, with the economic crisis, when only 20,900 were signed. Then began a sharp decline that in 2014 reached the lowest figure of this century, with 5,158 registered mortgages, although from there it grew slowly until reaching 7,934 in 2019. In 2020, with the pandemic, they fell slightly to 7,766 per year, and already in 2021 they shot up to 10,247 mortgages signed. A figure that, if the pace of the first quarter is maintained, will be exceeded in 2022. It should also be noted that the amount of mortgages has increased in the last two years, due to inflation and the increase in housing prices. At the same time, around 98% of the mortgages signed this first quarter of 2022 have been constituted on urban properties, of which 80% have been homes.
«Since you start applying for a mortgage until the signatures do not pass 15 days, it takes a long period of time, so I think that the increase in this first quarter of the year is not only due to the foreseeable rise in interest rates, but I think that it is due to the fact that there is more economic activity with the post-pandemic recovery, ”explains Martín Garrido, delegate of the Col·legi Notarial de Catalunya in the Tarragona district. Thus, he comments that “2019 was already a year of a lot of activity in the sector and the forecast was that 2020 would exceed it by far, although the arrival of the pandemic forced it to close for two months.” Despite the cessation of activity, Garrido recalls that the rest of the year “a lot was worked and done”, until in 2021 the constitution of mortgages soared.
Regarding interest, Garrido highlights that “most loans have gone to a fixed rate because an employee, with a certain salary, cannot be at the expense of the rises and falls in interest that you face with the variable rate”. In fact, now, with the positive entry of the Euribor, a rise of between 32 and 63 euros per month of variable-rate mortgages is expected.
The Tarragona notary supports other hypotheses that could respond to this increase in the demand for mortgages. On the one hand, Garrido speaks of a “sociological issue”, and that is that “14 years have passed since 2008 and there are many young people who want to buy who did not suffer that crisis, for them it is history.” Likewise, he recalls that “before the pandemic there were many operations that were not financed because people had more money, and now they ask for loans because they are much more careful.” In this sense, he justifies that the majority of mortgages are requested for urban properties because “the rustic ones are cheaper and they are paid in cash. In fact, the other day I signed a sale of a two-hectare plot of land for 2,000 euros.
For her part, Emma Monlleó, co-director of Finques Tarragona, defends that, although now the forecast is for interest rates to rise, with the negative Euribor they have been very low and therefore she believes that many people have taken the opportunity to sign mortgages. However, he also points out that, despite the economic crisis derived from the pandemic, “those people who have not suffered ERTE have had a lot of savings capacity”, and it is one of the causes that he associates with the increase in the demand for financing for the purchase of farms. In relation to the increase in the amount of mortgages, Ella Monlleó stated that “prices in the housing market have increased slightly, mainly due to inflation and the law of demand and supply.”
Enjoy the moment
One of the people who has opted for a mortgage in recent months is Aitor Ubeda, 28, and a resident of Torredembarra. He explains that “I didn’t jump in because I saw that interest rates could rise, but because many friends had taken out mortgages last year with rates below 1% and I saw that it was a good time and I could get something similar.” In this sense, he points out that “there were entities that already made me offers with a minimum of 2%, and others that only at a variable rate due to the instability of the market”, and adds that “in the end I signed it with an interest of 1.4 % at a fixed rate». To get an idea of the current situation, Ubeda explains that “some coworkers, who are about 50 years old, signed their first mortgage with rates of 8 and 9%.”