Spanish residential mortgages rose 29 percent in July from a year earlier, the most since March 2006, as economic growth made homebuyers more confident.
A total of 18,107 mortgages were granted, up from 14,055 a year earlier, the National Statistics Institute said today. That compares with 120,000 approvals a month at the peak of the housing boom. The amount of money lent to homebuyers climbed 13 percent to 3.2 billion euros ($4 billion).
“Financial conditions are improving, confidence is also improving and pent-up demand is now starting to appear, but Spain is still a very fragmented real estate market,” said Jose Luis Martinez Campuzano, a Madrid-based strategist at Citigroup Inc.
Two years after applying for a European Union rescue, Spain has become one of the fastest-growing euro-area economies as exports surged and investment rebounded. The Bank of Spain projects growth of 1.3 percent for 2014 and 2 percent for next year.
Home prices rose about 1 percent in the second quarter from a year earlier, according to data compiled by Spain’s General Council of Registrars. The organization estimates that prices have fallen 32 percent from the peak and are now at levels last seen in 2003.
“I would be very careful about extrapolating these increases into the future,” Campuzano said of the mortgage increase. “It’s still too early to be talking about a change in the trend.”