After almost a decade that the banks had paused mortgage disbursements and what they were giving concerned a small percentage of the real estate market, today mortgages seem to be turning the page.
As estimated by bank executives in RES, a number of factors lead the mortgage credit to growth rates of about 30% compared to last year and new disbursements for 2021 that will range to €900 million. The average mortgage has decreased compared to the average mortgage before the crisis, and the same funding is a prerequisite from the prospective borrower.
In particular, according to Piraeus Bank' s estimates, demand for mortgage loans is growing with the number of new applications this year showing an increase of more than 50% compared to last year, and with a large percentage of them leading to disbursements , since almost 7 out of 10 loans are approved. Today, according to Piraeus Bank, a couple without children and other loans, with a net family monthly income of about 1,500 euros, can acquire a property worth 150,000 euros by taking a loan of 100,000 euros for 20 years, with a total monthly installment that will not exceed 550 euros (including insurance premiums). After all, as the data show, the average customer is applying for a loan of 95,000 euros for 20 years and is willing to use equity at a rate of 35% to 40% (the minimum participation required is 20%).
As pointed out by the bank, one of the most important advantages for its customers is the preferential and completely personalized pricing of its products. The interest rate is set exclusively for him, according to the characteristics of the loan and his transaction profile, while at the same time the borrower can further influence the pricing by modifying the duration or the amount of his loan, among other things. In 2021, one in 2 customers who took out a floating rate mortgage loan got it with a final interest rate of less than 2.2%.
National Bank for Greece
According to the bank's management, there is a great demand for mortgages, which the recent decision of the banks to advertise their mortgages will significantly increase. This is explained by the fact that less than 1 in 10 transactions in the real estate market are made with mortgages. Nearly 100,000 properties will change hands in 2021 while only up to 10,000 loans will be given. Therefore there is a large margin for growth in mortgages, even with the current size of real estate transactions.
The average mortgage loan currently stands at €90,000 and shows an upward trend, mainly due to rising prices in the real estate market. It is estimated that currently at least 7 out of 10 loans are being approved in the market. Mainly income reasons but also existing debts are the main reasons for not accepting a request for a mortgage, according to bank data.
Alpha Bank
After a decade of recession in the Greek real estate market, the last two years have seen a steady and sharp increase in demand for housing through bank lending. An increasing trend is expected for 2022, as it is estimated that total disbursements will be close to €1.3 billion, according to bank officials. This positive picture is justified by the current lower commercial real estate prices compared to the past, the gradual recovery of disposable household incomes, as well as the particularly low lending rates, at the same time as rental prices are rising.
According to Alpha Bank, there is an increase in disbursements by about 50% compared to 2020, with an average requested mortgage loan amount of approximately 100,000 euros and an average loan term of 20 years. The maximum percentage of financing amounts to 80% of the commercial value of the property for the acquisition of a house, a fact that significantly helps the interested buyer in the acquisition of his own house with a bank loan.
Eurobank
According to the bank's estimates, there is already a significant increase in demand for mortgages, which on an annual basis is estimated to reach about 40%. This net trend is related to a number of factors. Specifically, despite the recent pandemic crisis, the Greek economy quickly entered an upward, growth cycle. At the same time, the finalization of the objective values, the general assessment for an increase in the prices of real estate and rents, given the parallel, intense, interest recorded by foreigners for the purchase of tourist real estate for own residence and / or investment, the resumption of construction activity with major housing / business development plans, such as Elliniko, the digitization of the Greek State that alleviates bureaucratic entanglements, the upcoming tax breaks in ENFIA, combined with the fact that banks are able and seek to offer stable mortgages with low interest rates , have contributed significantly to the increased demand for mortgages after many years. For the current year, ie with the data from the beginning of the year until now, the average loan is around 70,000.
Attica Bank
According to Attica Bank's management, a number of factors that affect the demand for the real estate market and the development of Mortgage Lending are estimated to create the conditions for a gradual increase in mortgage disbursements that may even double the disbursements in 2022. These factors are:
- The increasing trend in housing rents since 2017 that has resulted in a c.30% increase in real estate property rents in the center of Athens,
- The fact that we are paving the fourth consucutive year of increasing real estate property sale prices,
- The excess demand in the real estate market from both local and international prospective buyers,
- The favourable adjustaments in real estate property taxation
The chance to have someones rent been fixed to a low interest rate for the entire duration of the mortgage was also lead to an dilemma emerged... "Rent or Loan Installment" especially for young couples and families.
HSBC
Forecasts for the course of real estate market have been improved and an increase of 4% on average is expected. The continuous growth of tourism in recent years (excluding 2020) in combination with the major projects launched on the Athenian Riviera, such as the Greek, Faliriko Delta, Marina Alimou, the renovation of Glyfada beach, the new Metro line 4 , and energy projects in Northern Greece have given a more dynamic tone to the country's real estate sector, according to HSBC executives. The demand concerns main and holiday homes, from Greeks and foreigners, mainly Europeans, often for investment purposes. There is also an increased demand for home renovations.
