The volume of leu mortgage loans rose by RON1.5 billion equivalent in the last three months alone.
June was the best month for leu mortgage lending, which went up by almost 10% or more than half a billion lei. The increase in the stock of loans is a very good indicator of the new sales, considering these are long-term loans and the amount of loans maturing is insignificant.
Bankers and loan brokers say that they saw a resurgence in leu retail lending mainly in the second quarter of the year (April-June), probably because of the rebound of the economy, which grew by almost 4% in the first quarter, as well as to the halt of the home price downward trend.
The foreign currency mortgage loan stock continued to decline and reached EUR8.2 billion in June. Bankers began removing loans in default from their balance sheets, while new sales are almost non-existent, hence the decline of the overall volume. Analysts expect leu loans to offset decline in foreign currency loans by yearend.
“The actual trend of the private lending will return to positive territory in November. The factors supporting this scenario include the low level of interest rates given the monetary policy of the BNR (Romania’s central bank i.e.),” says Andrei Radulescu, senior economist with Banca Transilvania (TLV.RO).
Leu mortgage loans now account for almost 15% of the total mortgage loans granted by banks, having gone up as a result of the decline in interest rates, the restrictions set by the central bank on the sale of foreign currency loans and on the shift of the ‘First Home’ scheme to lei exclusively in the past few months.
(English version by Loredana Fratila-Cristescu)