The measures taken by the Government reduce mortgage foreclosures in 2022

Demonstration against an eviction in Las Palmas de Gran Canaria / Juan Carlos Alonso

The Royal Decree-law signed by the Council of Ministers in December extends the suspension of evictions until June 2023

In 2022 the total of
housing certifications for foreclosure – seizures after credit default– In the Canary Islands it stood at 617, which represented a decrease of 48% compared to the year 2021, according to data from the Property Registrars published yesterday. After this cut, in an exercise of rising interest rates, are the
extraordinary measures taken by the Government of Spain during the pandemic and that they suspended evictions and releases.

In fact, the 2022 embargoes are the fruit of the years before the pandemic. These
processes take up to more than two years, enter the number of months of installments that have to stop paying to start a procedure; the entity’s attempt to reach an agreement, and finally, the judicial process, according to sources in the real estate sector.

As for the
evictions or daciones in paymentlast year there was a rise of 68% compared to 2019, with a total of 459 but these processes are even longer files that go back to 2017, according to these sources.

During the year 2022, the Central Government applied urgent measures, understanding that they were necessary to respond to the situation of vulnerable households, in a context marked by the advance of the pandemic and the consequences derived from the invasion of Ukraine.

One of these measures contemplates coordinated action between the judicial bodies and the competent social services, including those households that are affected by procedures for the removal of their habitual residence, or when there are dependent persons, victims of gender violence or minors to post.

Another of the policies applied was to encourage a greater supply of rental housing at affordable prices and
promote the rehabilitation and improvement of the existing housing stockespecially reinforcing collaboration in these areas with the autonomous communities and local entities, supporting the process in an increase in budgetary investment for the year 2023.

The upward trend in interest rates continued to intensify the growth in the contracting of new mortgage loans at a fixed interest rate, reaching 67% of all residential mortgage loans in the last quarter of 2022. Consequently, contracts at a variable interest rate were 30.8%,
minimum of the historical series.

For the year 2023, this dynamic is expected to continue, especially taking into account the latest interest rate hike announced by the European Central Bank at the beginning of February, all as part of the objective to reduce inflation. According to industry sources, this increase will be reflected in the number of foreclosures, which should
go back up in 2023.

In the last twelve months, year-on-year growth in fixed interest rate contracts was 8.2 points, reaching a market share of 65%, the highest in the historical series, leaving variable interest rate contracts at 35 ,%, with 34.1% referenced to EURIBOR.

10% of evictions corresponded to foreigners

10% of the home certifications due to foreclosure in 2022 corresponded to foreigners, which kept the levels below the percentage of home purchases by foreigners, confirming the lower probability of ending up in a situation of financial difficulty. The fact that the nationalities that have led the purchase of housing during the last five years correspond, for the most part, to countries with good levels of per capita income helped to achieve this scenario.

Analyzing the total housing certifications for foreclosure by foreigners, the nationalities with the highest representation in the last quarter of 2022 were the British (12.5%), Moroccans (11%), Ecuadorians (8.7%), Romanians ( 6.6%), Ukrainians (3.58%) and Colombians (3.32%), leaving the rest of the nationalities below 3%.