Mortgages take more and more Spanish money

11th August 2004, Comments 0 comments

11 August 2004, MADRID - More than two thirds of the money owed by Spanish families is dedicated to buying a home.

11 August 2004

MADRID - More than two thirds of the money owed by Spanish families is dedicated to buying a home.

That is according to figures released on Wednesday by the aid foundation for drug-addiction (FAD) to coincide with its publication of a book on "‘The Family in 21st Century  Society" ("La Familia en la Sociedad del Siglo XXI").

Over the past  30 years, personal savings have fallen "drastically",  says the FAD, dropping from l 18 percent of disposable income in 1974  to around nine percent in 2002.

At the same time, the way families save has also changed as they have moved away from traditional products such as deposit accounts to variable-rate accounts and investment funds.

In one sector of the book, the BBVA bank's deputy director of studies, David Taguas, highlights the sharp growth in credit in recent years.

With an average increase of 15.6 percent between1998 and 2003, more than 11 percentage points of this growth was attributable to paying for properties, he said.

It was this growth in credit, combined with the "more modest" evolution of the savings market, that had sparked the "notable increase in family debt".

Last year these debts represented more than 40 percent of the financial wealth of Spanish families and approaching 90 percent of disposable income.

The very high level of variable interest loans increased the vulnerability of families to any directional changes in monetary policy,  added Taguas.

"The decision on becoming indebted should be taken on the basis of prospects for interest rates rather than the actual levels."

[Copyright EFE with Expatica]

Subject: Spanish news

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