- The European Central Bank will cut interest rates this Thursday, after two years of continuous growth. The increase or decrease in money has a direct impact on Euribor and the mortgages that citizens have to pay. But how will this change be noticed?
For two years, the European Central Bank (ECB) has continued to increase interest rates: By July 2022 they were 0% and now 4.5%. This measure of economic growth has been implemented by the financial institution led by Christine Lagarde, with the excuse of cooling the economy and dealing with inflation, in exchange for emptying the citizens’ pockets, with mortgages and much more expensive credits.
The ECB has now announced that this harmful and inadequate austerity policy, as the increase in inflation is more linked to market bottlenecks than to consumer demand, will change and reduce interest rates. In the absence of surprises, the decrease will be 0.25%, and it remains to be seen whether there will be more declines in the future.
However, the price of housing and mortgages is already influencing. The decline in Euribor in recent times, on the eve of the ECB’s announcement, has led to more and more citizens applying for the mortgage and to an increase in the sale of homes. According to the News Group, in April the number of mortgages signed increased by 46 per cent in Araba, Bizkaia and Gipuzkoa, and the number of homes sold by 35 per cent.
That the drop in interest rates affects the price of housing is the cider of another cuba. Housing is becoming increasingly ruined, whether it be rents, second-hand or newly created, as evidenced by recent data.
But that this affects the price of housing is the cider of another cuba. Both the rental, the second hand or the new, the dwellings are getting worse and worse, as the latest data show.
According to the index of the National Institute of Statistics, the price of housing in Álava, Bizkaia and Gipuzkoa increased by 6.4% in the first quarter of 2024 compared to the previous year, and in Navarre by 7.6%. This increase has been much higher in the case of new dwellings than in the case of second hands, but the latter have also increased significantly: About 5%.
In this way, the public will surely be able to make more use of banks to ask for money for a mortgage, but the housing available to live in a dignified way is still very scarce in Euskal Herria, for young people who want to emancipate themselves to reach a social emergency or for the citizens who want to live in their towns and neighborhoods.