Growth of home sharing market spurs demand for mortgage loans
The rapidly growing home sharing market is the reason for the small increase in interest in taking out a mortgage in Greece.
That trend is confirmed by bank data that show about a 50 percent rise in mortgage applications and a 30 percent increase in savings in the first five months of 2018 compared to the same period last year.
Bank officials point out that the rise in mortgage applications is also due to the fact that the figure was much lower in 2017, as the market had been frozen for years, so the new demand does not translate into any great amount. Still, the figures reflect a trend seen not only in mortgage issues and applications but also in the questions bank branches handle.
Although the new housing loans pale in comparison with those of the past, amounting to just 40 million euros per month, banks perceive this as the first sign of recovery. The existing demand mainly concerns loans for house purchases, but data from banks also show a recent rise in demand for loans for home repairs, which account for 20-25 percent of new issues. This is attributed to the interest of many owners in renting out their property through short-term leasing platforms such as Airbnb and HomeAway.
That growth in interest explains moves by banks such as Alpha, which has launched a new product called “Alpha Home Renovation,” providing loans for home renovations through a few swift procedures.
As the properties leased out through the online platforms have to be in full working order and well-maintained, a number of landlords have taken out loans to renovate the properties they wish to list for home sharing.
It is no coincidence that sales of white goods have also shown an increase, which is helping to keep home appliance stores afloat.
A recent study by Grant Thornton for the Hellenic Chamber of Hotels showed that the total number of properties listed for home sharing is estimated at 42,155 across Greece, while the annual revenues from short-term rentals are estimated at 860 million euros.
Bank officials explain that landlords who live in their own properties are starting to take a look at renovation loans, as the majority resort to fixing their old home instead of buying a new one.
