A new chapter is set to begin both in the field of housing loans and on the housing market, according to ingatlan.com’s experts. The increased interests are a given: on one hand, the interest in housing loans has increased by 43% on a yearly basis – on the other hand, the demand in the capital quickly absorbs new flats. Banks are expected to receive a key role in the future, mostly because they will realise the liquidation of the state housing benefits.
The state housing program, the ~Home Creation Allowance (CSOK) can be considered finalised following the modifications introduced in February, according to statements issued by the government. The whole system is based on the intent to motivate families to have children, since the amount of benefits are regulated based on the number of children a family has. The requirements are rather complicated, and strict penalties await those who intend to get around them. Ingatlan.com reckons that a new status quo is expected to be set both on the market of housing loans and the residential estate market, partly due to CSOK and the state of the economy. Last year, buyers mostly paid with cash, and banks only issued a relatively small amount of loans.
Waiting for a kick
“The housing loan market is yet to receive a kick, a trigger from the introduction of CSOK, while the majority of the banks have already prepared their solutions for CSOK by the middle of January or the beginnings of February – now, the growth can begin, as the inquiries are a given” – commented Péter Gergely, BankRáció.hu’s loan expert. (BankRáció belongs to the ingatlan.com group.)
On BankRáció’s site, approximately 300 000 loan calculations were made by visitors from the beginning of January to the middle of February, which is a bigger number by 43% compared to last year’s figures. “Loan calculations regarding CSOK were accounted for 28% of the total amount this year” – added Mr. Gergely. Banks play a vital role in the system, because, while the allowance is granted by the state, recipients can obtain the funds via the financial institutions. “The rules are given, but the practices of banks can differ, regarding the treatment of own funds for example” – noted the expert.
New bases, differences up to millions
The expert reckons that it is fit to speak of a new era on the housing loans market not only because of the predicted effects of CSOK but because Forint exchanges are finished, the growth in local demand shows that the households might have a stronger financial position than before. “In addition, we’re starting from a nice even figure, according to the central bank’s official data, the amount of loans issued for housing in December last year has hardly surpassed 3000 billion HUF.”
Thanks to the current ruling – in Mr. Gergely’s opinion –, the proportional payment rate preventing the indebtedness of households can result in a sustainable growth on the loan market. “This is a necessity, as the market hasn’t been too active. Banks have the funds to issue loans, more precisely, housing loans. It is equally important, if not more, that the acquisition of a loan requires a conscious choice. Not only because the rules of CSOK contain strict penalties in case of infringement, for example, if the owner doesn’t reside habitually in the property bought with the aid of the benefit. Also because a housing loan is a long-term decision, which should be made in accordance with the current financial margin we have. It’s also very important to know that there can be significant differences in the constructions each bank offers. With a duration of 20-25 years, this difference can mean up to several million Forints in funds, thus it’s useful to compare the range of offers you can choose from” – advised Péter Gergely.
“A 6 million HUF, considerably average housing loan with a duration of 20 years can have monthly payments that differ in up to 10 000 HUF in summary, depending on the bank – this can mean savings as much as 2.4 million HUF in total during the entire duration of the loan” – emphasised the expert. He reckons that it’s also important to take into account the period of interest when acquiring a loan, because the risk is more moderate in the case of a longer duration than that of an interest period that consists of only a few months.
The housing market is switching gears
According to László Balogh, ingatlan.com’s leading economy expert, the intensification of the loan market can make its mark on the housing market as well. “The real estate market is currently going through a considerable increase of activity: individuals have put up 71% more properties and flats to sale on our site than a year before, while the number of visitors has also increased by 39%” – explained Mr. Balogh.
Recent data shows an obvious increase of activity on the market of new housings in Budapest: the supply of 60-100 m2, newly constructed flats has decreased by 7% since the end of December 2015, while their average price has risen by 8%, reaching 40 million HUF. The category of flats with an area of 60-100 m2 is important because the high prices of new housing make them the most popular amongst buyers. The respective demand – as Mr. Balogh opines – could also be formed by the 10 million, non-reimbursable state benefit that can be obtained for buying these estates. He added that recent data shows an even bigger increase in demand: new housing can be sold very quickly, while prices are being made higher by the larger demand.
(Source: http://realista.hu/ingatlanpiac/uj-idoszamitas-a-lakaspiacon-most-nagyon-beindulhat/130376)
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