Malaga is the third Spanish province with the highest increase in the size of mortgage loans

Cristina Vallejo

Monday, 29 July 2024, 17:53

The average mortgage deal signed in Malaga province has already surpassed the levels of 2007, at the height of the last property boom, the housing bubble that ended in economic crisis from 2008 onwards.

The current 188,284 euros average borrowed on a mortgage is 8.5% above the figures of seventeen years ago when the average loan was just under 175,000 euros. This is in contrast to the price per square metre, which is still somewhat below previous bubble-bursting levels, at least according to official figures from the Ministry of Housing. Meanwhile, across Spain as a whole, the current average mortgage is still 5% below 2007 levels. Today's figure of around 141,500 euros contrasts with just over 150,000 euros on average three decades ago.

This news comes just after Malaga also became the third province where the average mortgage has risen the most over the last decade. In May, the latest month for which figures are available, the average mortgage loan signed in Malaga was close to 188,300 euros, an increase of 88% from just over 100,200 euros in May 2014.

Ahead of Malaga in this ranking are only the Balearic Islands and Las Palmas (Gran Canaria). The increase in the cost of a mortgage taken out on the Balearics is 145%, rising from 109,500 to 268,140 euros between 2014 and 2024. Meanwhile, for the Canaries, it has risen by 95%, or rather, it has practically doubled, since 10 years ago the average loan was around 64,500 euros and this May it is close to 126,000.

The average mortgage taken out in Spain as a whole over the last ten years has increased by 42%, from around 100,000 euros in 2014 to around 141,500 euros in the last year. This means that in Malaga house purchase loans have become more expensive than the Spanish average.

Malaga is also the third province in which the highest mortgage in Spain was signed in May: the average loan of 188,284 euros in this province is only surpassed by the 268,138 euros on the Balearic Islands and the 210,150 euros in Madrid.

However, ten years ago Malaga was back in tenth place in the mortgage rankings, behind Madrid, Basque provinces such as Guipúzcoa and Vizcaya, Catalan hotspots such as Barcelona, Lleida and Girona, as well as the Balearic Islands, Cantabria and Orense. In fact, the average mortgage signed in Malaga ten years ago was around the Spanish average, which was also around 100,000 euros. In contrast, in 2024 the average loan in Malaga province is around 35% more expensive than the average for Spain, currently less than 142,000 euros.

But, apart from these figures for mortgages signed in Malaga, which can be put down to the sharp rise in the price of housing in the province, one of the most intense in Spain, the reality that the National Statistics Institute (INE) has also revealed is that the signing of loans to buy homes continues to fall this year after the slump recorded in 2023 following the recovery of the real estate market in the aftermath of the pandemic. Buyers having to take out a bigger mortgage (creating more barriers to entry) is therefore beginning to have an impact on real estate activity, as can also be seen in the downward trend in property sales figures.

In May this year 1,230 mortgage deals were signed, a decrease of 27% compared to the total for the same month last year. Furthermore, sales fell that same month at a rate of 28%. Malaga is no exception. Mortgage activity and transactions have fallen throughout the country. Thus, in the last month for which data is available, 27,435 loans were signed in Spain, down 18% from 33,558 in 2023. And sales fell by 21.5% year-on-year across the country.

A couple of comparisons more specific to Malaga. The first: 62% more mortgages are being signed in the province in 2024 than in 2014. It should be noted that in that year the crisis that erupted in 2008 was still dragging on. Second point: if we compare current mortgage activity with that of 2007, we can see that it is four times lower. To be precise, the 1,230 mortgages signed last May contrast hugely with the more than 5,400 signed for in May 2007.