Photo: PixabayLast year, 6,717 housing loans were approved, while in 2021, that number was more than twice as large. Just a few months before interest rates begin to rise in the spring of 2022, Biznis.rs calculated that the number of approved housing loans in Serbia at the end of 2021 was 13,097, based on credit reports from the Association of Banks of Serbia for 2021 and 2022.
It is interesting, however, that the recently published Credit Report for December 2022 notes that the mass of housing loans increased by 12.6 percent, with the information that there are currently 159,007 users of housing loans in Serbia, the average amount of which is 3.9 million dinars. Economist Mihailo Gajić points out that the increase in the number of housing loans does not necessarily mean an increase in credit activity.
"The growth in the mass of housing loans is lower than the inflation rate, and to that should be added the further rise in real estate prices." "This means that credit activity in this sector has decreased in real terms," Gajić says in an interview with Biznis.rs.
At the end of 2021, according to data from the Association of Banks, there were 145,290 users of housing loans in Serbia, and that year began with a total of 132,193 approved housing loans.
The causes of the significant decline, when it comes to housing loans, should be sought in the sharp tightening of the monetary policy of the European Central Bank, which fights against inflation by raising reference rates.
On the domestic market, for example, if your loan interest rate is 3% plus 3M Euribor, it has increased from 2.43 percent in January to 5.254 percent at the end of November, a more than double increase.
"Therefore, the main cause of the decrease in credit activity is the increase in borrowing costs through the interest rate mechanism," concludes Gajić.
The Credit Bureau of the Association of Serbian Banks does not record a significant share of arrears in home loans for now; it is currently at a level of 0.6 percent.
"It is only at the end of next year that inflation is expected to return to the projected framework, and until then the central banks will also conduct restrictive monetary policies. Also, interest rates have risen rapidly—here the reference interest rate has been changed ten times in as many months—but they will certainly not decline so quickly. It's the same with inflation: once prices rise, it's very difficult to get back to where they were," Gajić explained to Biznis.rs.
Source: biznis.rs
