MADRID: Spanish home loans rose for the sixth straight month in November, a recovery expected to gather steam this year after European Central Bank efforts to funnel cheap credit to banks.
The number of residential mortgages handed out in Spain - one of Europe's most battered property markets - rose just over 14 percent in November from the same months in 2013, data from the National Statistics Institute INE showed on Tuesday. The total amount in the month lent jumped 12 percent.
ECB plans to pump hundreds of billions of euros in new money into a faltering euro zone economy, through government bond-buying and a cheap loan programme, is likely to fuel this incipient turnaround, bankers and real estate experts say.
"The bond-buying programme approved last Thursday by the ECB should create incentives for mortgage financing, as well as pushing Euribor down," Spanish property website Fotocasa said, referring to the bank-to-bank lending lending rate often used to underpin home loans.
Spain has suffered six years of plunging property prices, now down about 40 percent since their peak. That caused losses for many banks, with the weakest needing a European bailout.
The mortgage market has begun picking up again, although home loan approvals are still a fraction of what they were at the height of a construction boom in the early 2000s.
The ECB launched two cheap loan auctions late last year and that should also be starting to trickle down to banks, which are being encouraged to give credit to small companies as well.
Spanish lenders, which have recovered from their property woes and are trying to ramp up profits, have already launched a raft of lower mortgage offers in recent weeks.
Mid-sized Bankinter is only one of the lenders trying to capture clients with home loan deals. Its chief executive, Maria Dolores Dancausa, said last week there was "enormous competition" in the mortgage market.
"The real estate market is experiencing a revival, logically all the banks want to be there," she said.
The average interest on home loans in Spain was 3.49 percent in November, the INE data showed, down from 4.29 percent in the same month a year earlier.
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