07/04/2013 00:00
TW
0

PEOPLE in the Balearics took out 28'570 mortgages totalling 3'220 million euros last year, according to a report just issued by the National Institute of Statistics (INE). This represented increases of 3.62 and 12.35 percent respectively compared to 2002.
The report said that 27'214 of the mortgages, for 3'046 million euros were for buying property in towns. The remaining 1'356 for 173.6 million euros, were for purchasing property in the country. The stagnation of the Balearic economy was offset by the low interest rates which favoured a balancing out of the number of mortgages taken out, following the spectacular 14 percent growth recorded in 2002. However, the 12 percent increase in the amount of money borrowed reflects the soaring property prices in the Balearics. According to the ministry of public works, the average price of a flat in the Balearics is 1'724 euros per square metre. Vicenç Tur, head of the finance department of CAEB, the business association, said it was “logical” to expect a three percent rise in the number of mortgages taken out this year. He also forecast moderation in the increase in real estate prices, which, if it comes about, would lead to a reduction in the total amount of money borrowed. Tur also said that despite the fact that precautionary measures on building had been lifted, the limits to urban growth incorporated in the Territorial Plans of each island, will prevent growth levels in home construction reaching the levels of the second half of the 1990s. This was the time of a real estate boom, when the number of mortgages rose by 43 percent and the amount of money borrowed by 51 percent in 1998. This coincided with a lowering of interest rates. Tur went on to say that last year, a total of 11'980 homes were completed in the Balearics, according to public works ministry figures, compared to 12'679 completed in 2002. This, he claimed, shows that real estate promoters must have had a huge stock of licences before planning restrictions were imposed, because the number of homes released on the market in 1998 and 1999 ranged between 7'000 and 8'000. In Spain in general last year, the total value of mortgages taken out came to 88'428 million euros, nearly 22 percent more than 2002, while the number of mortgages rose by nine percent.
The average amount of mortgages taken out in
Average mortgage for a town property is
111 '959 euros; for a place in the country it rises to
128 '017 the Balearics last year was 112'721 euros, 8.43 percent more than 2002. This was higher than the national average of 107'836 euros, which in turn was nearly 12 percent more than 2002. The average amount of mortgages for town property was 111'959 euros, an 8.38 percent increase, while for country property it was considerably higher at 128'017 euros. The growth level of the average mortgage in the Balearics has been fairly steady over the last three years: 7.41 percent in 2001; 8.95 in 2002 and 8.43 in 2003, after the huge leaps of 1999 (22.77 percent) and 2000 (also 22'77 percent).