Government-backed, the mortgage loans were the growth driver of the retail market in the crisis years but the growth pace has slowed down over the last few months, as bankers would rather wait and see what happens next, partly because of the introduction of stricter rules on foreign currency lending to individuals.
Banks have more than 220,000 mortgage loans in their portfolios, up from less than 160,000 back in the fall of 2008, when the crisis was just beginning, Credit Bureau data reveal. The “First Home” scheme helped sell more than 53,000 loans in the last two years alone.
Government-secured loans are not subject to the new rules of the central bank so that banks approved 2,000 “First Home” loans in January alone, worth about EUR80 million in all. Sales of standard loans were not frozen completely, either, but were unable to keep up with the number of accounts closed.
“I’ve noticed a decline in demand for loans partly because of the weather,” says Anca Bidian, chief executive officer of loan broker Kiwi Finance. “At the same time, these two months overlapped with the period of time before the implementation of the new lending rules, when the market was more cautious. We chose to wait for banks to implement the new rules in some cases.”
There are no data about the new loans granted by banks but in mortgage loans’ case, the increase in the total number used to be quite indicative of the new sales, considering they are long-term financing and repayments are insignificant. Bankers closed quite a high number of accounts during the crisis, not because customers repaid their loans, but because they could not do it.
The decline in the sales is shown in the data published by the central bank on the total volume of mortgage loans, which fell for the first time in the past year in January. The volume of loans granted by banks for buying a home fell by the equivalent of EUR65 million in January and reached EUR7.68 billion.
(English version by Loredana Fratila-Cristescu)