Spanish Mortgage Rates - October 08
The Mallorca Mortgage Business
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Some good news is at least emerging out of the general economic and financial gloom with the Euribor, the main reference rate for Spanish / Mallorca mortgages, continuing it's downward trend of the last fortnight to situate it's self at 4.98%, the first time it has been below 5% since May.
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With the president of the ECB strongly indicating that next week should see a further cut in Eurozone interest rates it seems likely that the Bank will use any opportunity to reduce rates in an attempt to boost the dramatic slowdown in the European economy. That said they will also want to remain wary of cutting rates too far and too quickly leaving the authorities without sufficient ammunition to fight future problems at a time of such financial and economic weakness.
With most other variables associated with the Spanish / Mallorca property market remaining so weak this trend in the Euribor will at least provide some relief for existing home owners and for those wishing to take out mortgage finance to fund a purchase, just when some good buying opportunities are starting to emerge.
Regarding the latter we are at last seeing, in Mallorca, buying opportunities due in the main to some early distressed sales and general pressure on the new homes sector. In the months ahead we foresee this feeding through to the market more generally as property owners wanting or needing to sell repricing their homes to reflect the new "economic reality". That said this is only likely to effect a minority (all be it growing) of properties resulting in a market with very wide variations in prices, not all of which will be that obvious.
Critical for buyers will be good research, and specifically valuation advice, so that individual buying opportunities can be analysed and an objective view taken prior to any purchase decision.
For further information on the Mallorca property market please contact David Novi BA MPhil MRICS at The Mallorca Mortgage Business(
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