The mortgage market It will contract over 20% and 30% in 2020 due to the slowdown in the economy due to the pandemic that has caused the coronavirus. José Sevilla, CEO of Bankia, already warned that the entity he directs already works with those figures and bankers consulted by Vozpópuli confirm that this could be the general trend for the sector by the end of the year.
In fact, Onur Genç, number two of BBVA, also stressed during the press conference on the bank’s results that in April the signing of mortgages had plummeted by 55%. “Where before 100 were signed now 45 are signed,” said the Turkish banker. However, the entire sector assumes that the loan portfolio will close positive this year because the drop in mortgages will be offset by the increase in business credit.
Bad start to the year
It should be noted that the number of mortgages constituted in January and February fell by 8%, without in any of the two months the crisis of the coronavirus in Spain and, therefore, a good part of economic activity had not been paralyzed. However, in February, the number of mortgages for home purchases grew by 16.1%, reaching 36,050 contracts, according to provisional data provided this Wednesday by the National Statistics Institute (INE).
On the other hand, the Euribor At twelve months, the most used indicator in Spain to calculate mortgages, it experienced an upturn in the last month, reaching -0.106%, compared to -0.266% in March. This rebound is related to the new stimulus measures adopted by the European Central Bank (ECB) to face the strong recession in Europe as a consequence of the coronavirus.
The collapse of new firms also means less revenue for the State. In fact, the Government recognizes in the Stability Plan sent to Brussels that the collection for the tax on capital transfers (ITP) and that of documented legal acts (AJD).
The government foresees that the Gross Domestic Product (GDP) from Spain will fall 9.2% in 2020, an even more pessimistic forecast than that made by analysts from other entities and the Bank of Spain, and that the unemployment rate The country will go from 14.1%, which is at the end of the first quarter to 19% at the end of the year.
According to government estimates, the private consumption will collapse a 8.8% this year while the investment of companies (measured through Gross Fixed Capital Formation) will sink 25.5%, which will depress national demand and lead to GDP to suffer an unprecedented drop.
The public debtFor its part, it will go from 95.5% of GDP to 115.5%. The government has not included its 2021 deficit and debt estimates in the plan, and has stated that it will do so in October when it sends the program update to Brussels and there is less uncertainty.