Spanish Mortgages fell 24% In October

The amount of Spanish mortgages sucessfully applied for in October of this year decreased the most since April 2009 as demand fell away ahead of the expiry of a tax incentive.

There was a decrease of 24% on last year, the National Statistics Institute (INE) said in a statement today. Advertised prices for resale properties fell by 5.7% in 2010, according to another report published today by Idealista.com, a portal for Spanish properties.

The mortgages decrease coincides with a fall in home sales, which dropped by around 18% compared with the previous October, to what is the lowest level on record. Spanish banks, which have what the Bank of Spain terms “troubled exposure” to property assets of 181 billion euros, are hoping for a recovery in the market in order to help them move their foreclosed property taken onto the books during the country’s property slump.

The sales of Spanish property had increased during the year to August until a year-end deadline to lock in a tax rebate, valued at as much as 1,352 euros a year.

Mortgage lending by value fell 33% compared to a year earlier, the most since October 2009, thaccording to the INE report. Total housing permits fell 34% in October from the same period the year before, the Development Ministry said in a separate statement.