Spaniard's home is still his castle
10 December 2004, MADRID –The demand for mortgages among Spaniards showed no sign of letting up in October as the country's property boom continued unabated, according to a new report by the European Central Bank (ECB).
10 December 2004
MADRID –The demand for mortgages among Spaniards showed no sign of letting up in October as the country's property boom continued unabated, according to a new report by the European Central Bank (ECB).
It mirrored a continuing appetite for mortgages in the rest of the so-called euro-zone, said the ECB.
According to the latest figures from the Spanish Mortgage Association (AHE), mortgage credit in October alone totalled EUR 9.483 billion.
This brought new loans granted in the first 10 months of the year to EUR 92.817 billion, a rise of 19.8 percent from the same period a year earlier, and more than the total for the whole of 2003.
Total outstanding mortgage credit at the end of October stood at EUR 511.521 billion, a rise of 22.8 percent year-on-year.
House prices have more than doubled in the past four to five years, fuelled largely by historically low interest rates.
In its monthly economic bulletin for December, the ECB also noted buoyancy in property markets in other European countries.
"The very low level of interest rates is also fuelling private sector demand for credit. In particular, the demand for loans for house purchases has continued to be robust, supported also by strong house price dynamics in several euro area countries," the report said.
While the ECB said that annual inflation is likely to remain above its target of 2 percent in the coming months due to higher oil prices, it was likely to fall below that level next year if no "further adverse shocks" take place.
This would suggest that interest rates are likely to remain at current low levels until economic growth picks up more strongly.
[Copyright EFE with Expatica]
Subject: Spanish news