The credit crunch became much more severe in 2011, a year in which the Greece and sovereign crises caused havoc across the EU and banks struggled to get financing. These circumstances have caused sector-wide real estate assets, the volume that the banks have accumulated on their balance sheets, to shrink by 5.7% during the past year.
This percentage, nonetheless, does not reflect the extent of the real estate drought. If new loans are taken into account, then a a contraction can be seen across all categories, from home loans to loans granted to companies.
According to figures from the Bank of Spain, which are still provisional, the family home loan is the form of credit that has suffered the most from adverse conditions in the credit market. During 2011, Spanish banks granted 37.525 billion euros in home loans, a figure that is 46% less than the year prior when it granted nearly 70 billion euros.
This year's decline is far sharper than last year, when home loans dropped off 5% compared to the year before.
