Bigbank: home loan market remains active, average loan amount made a significant jump

The main indicators of home loan market activity—the number of applications and contracts—remained similar in November to the two preceding strong months, the average loan amount increased by nearly 15% compared to October and amounted to 158,837 euros, according to Bigbank's loan portfolio analysis.

According to Jonna Pechter, Bigbank Estonia's head, the home loan market reached a new level in early autumn and has now stabilized there. "There were already positive signs of market recovery in spring, but the continuing fall in Euribor has breathed new life into the market," commented Pechter, who believes the positive trend will continue next year as well. "If the average property price remains at a similar level as before, then new buyers are certainly expected to arrive on the market," believes Bigbank's head.

Compared to November of last year, the number of home loan applications has grown by 54% and the number of contracts by 62%. "Last autumn and winter were the most difficult on the market, loan money was expensive and so mostly cheaper properties made it to transactions. Today money is cheaper, incomes have grown over time, and people have greater borrowing capacity and also more borrowing confidence," comments Pechter and recalls that if a year ago the average loan amount was 108,000 euros, it has now grown to 158,837 euros, or more than 50%.

Early December brought positive news that the Climate Ministry wants to make the state guarantee for rural residential loans available in new regions and raise the collateral ceiling. "Bigbank provides home loans everywhere in Estonia and such a state initiative makes lending possible for new hardworking families whose home purchase plans have just barely fallen short of the previous limits, so to speak," emphasized Jonna Pechter.