The loan to value ratio for housing in Spain over the period 2004-2016
Olympia Bover (),
María Torrado and
Ernesto Villanueva ()
Economic Bulletin, 2019, issue MAR
The ratio between the amount of mortgage loans and the value of housing (the loan to value ratio) is a useful indicator for studying the financial situation of households. Two main price indicators are used to measure loan to value ratios for housing in Spain at the time of purchase: the transaction price recorded at the Property Registry and the appraisal value. Having generated a sample in which both price indicators refer to the same set of housing, the median loan to value ratio between 2004 and 2007 is found to stand between 70%, when the appraisal value is used, and 107%, when the transaction price is used. The difference between these two ratios narrowed from 2010, with the loan to value ratio using the appraisal value remaining at around 70%, while the ratio based on the transaction value fell to 80%. The Spanish Survey of Household Finances (EFF), conducted by the Banco de España, is an alternative data source, allowing a loan to value ratio to be obtained directly from households’ responses. This ratio, based on EFF data, has evolved in a similar way to the one derived from the transaction prices recorded at the Property Registry.
Keywords: mortgages; house prices; loan to value ratio (search for similar items in EconPapers)
JEL-codes: D14 E21 G21 (search for similar items in EconPapers)
Note: Analytical Articles
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