Although there has been a time of ’theoretical panic’ due to the rising EURIBOR, the Spanish property sector and mortgage market will progress during the second half of the year along the same positive lines recorded in 2021. Financial institutions are adapting to the current context and offer very competitive fixed rate mortgages, beyond Spain’s employment stability. As informed by Tecnotramit, one of the leading service companies for financial institutions and businesses in Spain and Portugal.
Given the economic policies the Federal Reserve and the European Central Bank will promote from September onwards to cool down the economy, the company predicts the inflation rate will stabilise at around 5% in 2023, far from the current 10% as all of the aforementioned is ‘associated with an eventual recession that some structural sectors point to due to difficulties in supply and energy.’ In this sense, Tecnotramit points to the Cold War and the weakness of Spain’s industrial sector as the main threats to its economy and property sector mid-term.
‘Excellent’ time to apply for a mortgage
The housing market is going through a good period thanks to the favourable financing conditions that banks have been offering for the last few years, including nowadays. Figures are very positive, despite the volatile economic environment and macro-statistical figures continue to show year-on-year increases. On the one hand, the pandemic slowed down many mortgage transactions momentarily, but then generated an upward rebound effect accelerated by low interest rates. On the other one, the outbreak of the war between Ukraine and Russia predicted a drastic drop in property transactions involving financing, a decrease that has not yet occurred.
Tecnotramit stresses the ‘current excellent moment to take out a mortgage’ due to stability of key indicators such as the employment rate, interest rates, and the high housing demand for the purchase of homes, whether for residential or investment purposes. ‘Those with savings do not have many more options when it comes to investing in more reliable markets than property,’ says Carles Solé, Tecnotramit’s Mortgage Loan Manager. The company states, in order to purchase a house in a large Spanish city, any mortgage with an interest rate of 2-3%, depending on whether it is a subsidised mortgage or not, will interest the consumer.