Czech mortgage market surrenders
Güncelleme Tarihi:
Agence France Press
Oluşturulma Tarihi: Şubat 20, 2009 00:00
PRAGUE - The once-blossoming mortgage market in the Czech Republic has suffered a hard blow as banks have turned tight-fisted amid the global downturn while home buyers are waiting for prices to bottom out.
Czech mortgage lending contracted by almost half on an annual basis in January following two record years, data from banks showed Thursday.
"Home prices started to fall and clients put off the purchase, waiting for even better prices. Besides, commercial banks are markedly less willing to lend than in the past," Next Finance analyst Vladimir Pikora told AFP.
The volume of mortages sold to Czechs fell by 44 percent in January against the same month a year ago to 4.6 billion koruna (160 million euros, 203 million dollars), said Hypoindex.cz, which monitors the nine largest Czech lenders.
The banks granted 2,675 mortgage loans in January, down from 4,817 loans worth 285 million euros in January 2008.
The decline began in 2008 with the government reporting mortgage volumes over the whole of last year dropped to less than four billion euros from a record-high five billion euros in 2007.
The drop in lending is not "merely a matter of demand for loans -- supply matters too," Pikora said, pointing to banks' stricter approach to borrowers and their reluctance to slash borrowing costs.
The Czech National Bank cut its benchmark rate by 0.5 percentage points to a record-low 1.75 percent earlier in February, but most lenders ignored the move and decided to keep their interest rates on hold.
"Home prices started to fall and clients put off the purchase, waiting for even better prices. Besides, commercial banks are markedly less willing to lend than in the past," Next Finance analyst Vladimir Pikora told AFP.
The volume of mortages sold to Czechs fell by 44 percent in January against the same month a year ago to 4.6 billion koruna (160 million euros, 203 million dollars), said Hypoindex.cz, which monitors the nine largest Czech lenders.
The banks granted 2,675 mortgage loans in January, down from 4,817 loans worth 285 million euros in January 2008.
The decline began in 2008 with the government reporting mortgage volumes over the whole of last year dropped to less than four billion euros from a record-high five billion euros in 2007.
The drop in lending is not "merely a matter of demand for loans -- supply matters too," Pikora said, pointing to banks' stricter approach to borrowers and their reluctance to slash borrowing costs.
The Czech National Bank cut its benchmark rate by 0.5 percentage points to a record-low 1.75 percent earlier in February, but most lenders ignored the move and decided to keep their interest rates on hold.