Spanish Mortgage Lending Surges 48% as Homes Recovery Takes Hold

Spanish mortgage lending rose the most in 11 months in July as competition between lenders helped curb borrowing costs.

Lending for all types of property climbed to 4.68 billion euros ($5.2 billion), a 48 percent increase compared with a year ago and the biggest percentage gain since August 2014, according to data released by Spain’s National Statistics Institute on Friday. The amount of credit granted to home buyers rose 27 percent to 2.28 billion euros, the data showed.

Lenders recoiled from granting mortgages as Spain headed into a real estate crash that led to a 41 billion-euro bailout for its banking industry in 2012. They are now vying with each other to make home loans as gross domestic product grows at its fastest pace in eight years and the European Central Bank suppresses borrowing costs.

Spanish home prices jumped 4.2 percent in the second quarter, according to data released by the National Statistics Institute on Sept. 8. That was the fastest clip since the institute started publishing real estate values in 2007. Prices are 42 percent below their peak in 2007, according to Tinsa, a property valuation firm.

Source: Bloomberg