The Evolution of Spain’s Economy Continues to Create Optimism

The Evolution of Spain’s Economy Continues to Create Optimism

According to data from the General Council of Notaries, the sale of housing showed a year on year increase by 6.0%, reaching 47,234 operations. The data for the 3rd quarter shows a better performance compared to the same period in 2016.

Monetary policy continues to stimulate mortgage lending at the last meeting in September of the ECB. There were no changes with respect to its monetary policy as the central bank maintained the benchmark interest rate and reiterated that it will continue to carry out the current purchases of monthly assets until the end of December 2017 or, if necessary, ahead. According to the Bank of Spain, the new loan for housing acquisition grew 30.4% year-on-year in August (18.3% excluding renegotiations) and in the first eight months of 2017 the new housing loan, excluding refinancing, grew 16.8% year-on-year.

in the first seven months of 2017 approximately 136,000 new mortgages were granted, 13.2% more than in the same period of the previous year. The data for 2Q17 confirm that prices continue their positive trend While data published by the Ministry of Development shows the price of housing in Spain had a year-on-year increase of 1.6%. On the other hand, INE also published the Housing Price Index (IPV), which showed a year-on-year growth of 5.6% at the national level. Following the data published by the INE and according to the typology of housing, the price of second-hand housing grew by 5.8% year-on-year, compared to 5.3% in 1Q17, while the new one grew by 4.4% on-year compared to 5.5% in the first quarter. In 2Q17 all the autonomous communities, except Asturias, experienced a growth of prices, according to the INE. The highest revaluations were in Madrid, Catalonia and the Balearic Islands, with year-on-year growth rates of 10.9%, 9.3% and 7.4%, respectively.

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Source: BBVA Research  02 October 2017

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