Friday, 5 April 2024, 09:39
The average mortgage taken out in Malaga province in January reached 194,722 euros, 14.27% higher than in the same month last year when it was around 170,400 euros. This makes it the second highest average mortgage lending total in Spain, the Balearic Islands taking top spot at 207,110 euros. Still, Malaga has managed to close the gap with these islands, largely because the average loan in the Balearics has fallen by 21% – a year ago it was over 262,000 euros. So, one year ago the average mortgage in Malaga was 35% lower than in the Balearic Islands, but now the gap is just over 5%.
With the 14% increase in the amount of the average mortgage taken up in the province, Malaga is the fifth area in the country where it has risen the most, behind Cáceres (up 27.5% to 108,000 euros); Cuenca (up 21.5% to 91,900 euros); Las Palmas (up 21.27% to 118,800 euros); and Melilla (up 18.35% to 154,000 euros).
138,148
euros
is the average mortgage amount taken out in Spain last January, 2.7% lower than last year.
However, across Spain in general the average mortgage amount has fallen by 2.7% in the last year, from almost 142,000 euros to just over 138,000 euros.
Fewer mortgages, steady sales
This increase in the average mortgage amount borrowed in Malaga has come about despite the reduction in the number of housing loans taken out in the province. According to recent figures published by Spain’s national statistics institute (INE), in the first month of this year 1,544 mortgages were contracted in Malaga, which represents a decrease of 17% compared to the 1,862 in the same month last year. That figure in turn was 12% lower than that of January 2022. This means that fewer but larger mortgages are being agreed.
The first month of 2024 is the lowest figure for mortgage signings since the same month in 2021, when 1,252 home loans were concluded. But it is very similar to 2018 figures and is above those that were common in the middle of the last decade – varying between 1,100 and 1,200 loans per month. It is, however, a far cry from those of 2006, 2007 and 2008, when there were more than 4,000 or even 5,000 mortgages taken out every month.
This 17% fall in the number of mortgages for Malaga is more dramatic than for Spain as a whole, where the drop was 10%, from almost 37,000 in January 2023 to 33,128 in January 2024.
While the number of mortgages falls, the INE report also revealed that the number of property sales and purchases remains the same: the 3,245 real estate transactions recorded in the first month of this year are a couple more than the 3,243 in January 2023. Meanwhile, in Spain as a whole, sales fell by 2% year-on-year, from almost 55,500 to 54,346.
52%
of homes bought in January were paid for in cash
For the first time since January 2014, the number of homes sold to cash buyers exceeded the number financed with mortgages.
The fall in mortgage signings while property sales remain steady can only mean one thing: an increase in the number of properties bought for cash in Malaga province. The figure of 3,245 homes purchased in January contrasts starkly with the 1,544 mortgages signed for in the same month. This means that 47.5% of purchases were financed compared to more than 52% paid in cash. A year earlier, however, 57% of purchases were financed and 43% were in cash. For the first time since 2014 the number of homes bought for cash exceeds the number of those purchased by mortgage. The year in which the highest proportion of purchases required bank financing was 2020: in January of that year, mortgages accounted for 73% of all property purchases.
What is happening in the country as a whole? Around 61% of sales were financed with mortgages last January, compared with 39% paid in cash. A year earlier, 67% of homes were paid for using a mortgage loan, compared with 33% paid in cash. In 2020, the year of highest mortgage financing, only 14% of houses in Spain were paid for in cash.
