Mortgages Plunge 42% from Year Ago in Spain, 38th Consecutive Drop; Signs of Recovery? Spain Need Another Bailout?

Courtesy of Mish.

Prime Minister Mariano Rajoy wants you to believe the Spanish economy is improving. One look at housing suggests any improvement is an illusion.

Here are some highlights from a translation of the La Vanguardia article Mortgages plummet 42.2% in June

1. The number of mortgages for home purchase in June fell 42.2% compared to June of 2012
2. Mortgages declined every month for 38 months. June signed just 14,053 home mortgages, the lowest monthly figure of the last ten years.
3. The six-month total from January to June 2013 was 115,895 signed mortgages. That is less than the one-month total for May of 2007 which had 118,669 signed mortgages.
4. The average value of mortgages dropped, down 9% from a year ago to 97,495 euros.
5. This was the worst half-year since the data series for this indicator began, in 2003.

Signs of Recovery

The Telegraph says More pain in Spain but signs of recovery.

The latest government figures show that in June Spain’s exports surged 10.5pc from a year earlier, a boom that nearly wiped out the nation’s trade deficit. Spain’s trade deficit was €106m in June, a steep drop from the €2.7bn deficit registered a year earlier and a figure heralded by the conservative government of Mariano Rajoy as a long period of recession was finally coming to a close.

Last month Spain’s national statistics agency reported that GDP had decreased by only 0.1pc in the second quarter of 2013 compared to the first, which saw a bigger decline of 0.5pc. That and a drop in unemployment figures, largely considered to be a result of seasonal hiring in the tourism industry, are the first signs of the “light at the end of the tunnel” that the government has been promising since initiating a series of deeply unpopular austerity measures.

Ministers and officials have been keen to hammer home the message that the worst of the crisis has passed. “Our economy has turned the corner and we are at the start of a change in trends which will allow us, with effort, to create jobs again. The foundations have been laid,” Rajoy said at an event in July, shortly before leaving Madrid for his summer holidays. Luis de Guindos, Spain’s Economic Minister meanwhile was quick to point out that “the recession has come to an end”.

Foundations? What Foundations?

I would like to ask Rajoy “precisely what foundations have been laid?”

1. Is the banking crisis over?
2. Is Spain out of the Eurozone?
3. Was there pension reform?
4. Work rule reform?
5. Have banks written off all bad property loans?
6. Are Spanish banks recapitalized.

The answer to each of those question is “No”.

Spain Need Another Bailout?
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