Updated Balearic Property News

27 April 2010

The number of approved mortgages grows 22% in the Balearic Islands

The number of mortgages on homes in the Balearics increased by 21.9% in February compared to the same month of 2009, reaching 1506, according to the National Statistics Institute (INE .) 

Thus, the increase recorded in February is much higher than that recorded in January, when the number of mortgages on homes in the islands increased 3.39% to 1393 properties. Thus, it appears that the recovery of the housing market in the Balearics progresses faster than in the rest of the country where the rise in February was 8.5%, according to the INE. 

In inter-rate, foreclosed homes rose in February this year by 8.1% compared to the average rise in the country (2%). 

In February The Balearic Islands were the autonomous community which had the highest average amount mortgaged in rural and urban areas, with an average of 206.102 €. A total of 2365 mortgages have been constituted over a total amount of 487 million €. 

The Balearic Islands registered in February 269 properties with a mortgage established for every 100,000 inhabitants, 7.6% more. 

Returning to the property market in February the borrowed capital for the signing of the 1506 mortgages on homes exceeded 180 720 million Euros, 5.9 percent more than in 2009, while the average amount of mortgages stood at 120,000 Euros, compared with 138 112 Euros in the same month last year (-13%). 

In the second month of the year 690 home mortgages were cancelled, 15 percent more than in 2009. In addition, 802 dwellings changed the conditions of  the mortgage, 7.6 percent. 

Other communities 

The number of properties with new mortgages constituted per 100,000 population were only higher in  La Rioja (374) and Valencia (274). More negative annual rates corresponded to Cantabria (-37.5%) and Extremadura (-27.5%) while there were more positive in the Basque Country (44.4%) and Asturias (17.7%). 

Rate of interest 

In the whole country the average interest rate of mortgage loans was 3.97% in February, 26.5% less than the same month of 2009 and 2% lower than in January this year. 

In February the average interest rate of mortgage loans of savings banks was 4.13% and the average period 22 years, while banks paid an interest rate of 3.81%, with a deadline through 21 years. 

95.7% of mortgages in February used a variable interest rate, compared to 4.3% fixed rate. Among the variables, the Euribor interest rate was the most used reference in the constitution of mortgages, which figured in 89% of new contracts.

Moreover, the total number of mortgages with changing circumstances in February amounted to 43,882, an increase of 10.5% over the same month of 2009. In the case of housing, the number of mortgages which changed their terms rose 10.5% annual rate, to add 27 186.

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