Strong demand for mortgages
Housing credit expands as potential buyers seek to benefit from still-low interest rates
Demand for housing loans has continued unabated after the January-June semester, as after a long lull over previous years, households are scrambling to meet their housing needs while securing the long-term low fixed interest rates that apply today.
Investing in real estate is not only a timeless characteristic of Greeks, but also a safe haven in periods of high inflation when interest rates on deposits remain at almost zero and eat away at disposable income. This is why households are turning to the property market to either buy or invest in an effort to protect their savings over the long term.
According to Kathimerini, demand for housing loans in terms of new requests continued in July at the high levels of the previous six months, recording an increase of 8.3%. Mortgage applications increased to 3,900 from 3,600 in July 2021, following the rise in demand recorded in the first half of the year, when applications for new loans also increased by 8.3%, and from 24,000 in the corresponding period last year they reached 26,000.
New housing loans issued by banks in July increased to 95 million euros from €88 million in the same month last year, recording an increase of 7.9% and bringing new disbursements in the seven months to €645 million euros, against €438 million in January-July 2021.
New disbursements jumped in June to €130 million as banks rushed to approve applications received in previous months, ahead of the announcement of the results of the second quarter and the need to improve performance in new loans, which is their main field of competition after the reduction of bad loans. In particular, disbursements in the first six months of the year jumped to €550 million, registering an increase of 57.1%.
Strong demand for mortgages has, according to banking sources, been fueled by the fact that the ECB’s rise in key interest rates has yet to be reflected in new loan disbursements, which are dominated by the still-low interest rates banks offer.
