Home deals fall as boom in housing hits the wall
The number of home loans granted in November of last year dropped sharply in what was another clear sign that Spain's massive housing boom has ended.30 January 2008
MADRID - The number of home loans granted in November of last year dropped sharply in what was another clear sign that Spain's massive housing boom has ended.
The National Statistics Institute said Tuesday the number of housing deals in the month dropped by just under 15 percent in the month from the level seen in November 2006 and by 3.7 percent from October of last year.
As a result of the drop in property transactions, mortgage lending in the month dropped 13.3 percent year-on-year and 6.1 percent from October to EUR 13.80 billion. The average home loan granted also fell 2.5 percent to EUR 147,018, indicating easing house prices, after increasing on average by 150 percent over the past decade.
Property consultant Consultora Inmobiliaria Grupo i yesterday predicted house price inflation this year would come in below consumer price inflation.
The report said the lack of confidence sparked by the fallout from the US subprime mortgage crisis and higher interest rates was being reflected in a sharp drop in the rate of property sales.
"The sector is going through an adjustment phase," Grupo i Chief Executive Officer Ignacio Pindado said at a presentation of the report. "There are no reasons to speak of a general crisis given that the macroeconomic indicators don't invite that assessment," he added.
[Copyright EL PAÍS / Adrián Soto 2008]
Subject: Spanish news