Spain’s vibrant property market just showed another small signal of slowing in the end of 2018, as the new loans in houses recorded the lowest pace in four years, Reuters reported.

While the number of new mortgages on houses reached a seven-year high in 2018, the annual growth slowed, according to latest data released by the Spanish National Statistics Institute. The €42.7 billion lent represented a double-digit jump from 2017, yet the increase eased from the previous year’s.

The number of new house mortgages rose 10.3% last year, INE said. That’s down from growth of 10.7% in 2017, 14.6% in 2016 and 20.8% in 2015.

As an investment, homes have been beating many major alternatives. Prices rose an annual 7.2% in the third quarter, the most recent periodavailable. That compares with a drop of 9.6% in the benchmark IBEX 35 index in the same 12 months, and a 0.1% gain in a one-year to 10-year Spanish government bonds index.

Activity varied widely across the country, with regions like Valencia and Madrid showing more than 14% mortgage volume growth, to increases as low as 5.2% in Galicia and 2.4% in Aragon.

Surging purchase prices and rents in big cities in the past few years nevertheless are provoking the Socialist government to plan urgent legislation to cap apartment rents. Prime Minister Pedro Sanchez is negotiating a mechanism that could allow regions to limit rental increases, El Pais newspaper reported.

Sanchez would need parliament to ratify the decree. He faces possibly being driven from power in April general elections, according to opinion polls.

Original Story: Bloomberg | Todd White and Macarena Muñoz Montijano
Photo: FreeImages.com/Philipp K
Edition:Prime Yield