Bigbank: Home Loans Made a Jump of More Than 30% in March
The number and financial amount of home loan agreements grew by more than 30% in March compared to the previous month, and the average loan amount was 127,603 euros, according to Bigbank's loan portfolio analysis.
According to Bigbank Estonia's director Jonna Pechter, the total amount of home loan agreements in March was 31% higher compared to February and 47% higher compared to March of last year. "We did anticipate growth in the home loan segment, but a jump of nearly one third is a pleasant surprise for us as well. Hopefully, this is also a sign that Estonian consumers' confidence could gradually strengthen," commented Pechter, and added that the number of new applications also grew by 25%, which gives hope that April could also be at least as active in the home loan market.
According to Bigbank's director, March's home loan growth is also a response to speculation about how various international economic and political news affects the market, which in their contradictions can mainly cause confusion among people. "The numbers confirm, however, that one's own home is one's own home and people won't postpone buying a new home when the need arises and the opportunity presents itself," said Pechter, adding that today's new home purchase is favored by both the interest rate environment and wage growth as well as the fact that real estate prices have remained at the same level for several years. "In conditions where everything else around has become somewhat more expensive, purchasing a new home is relatively more affordable compared to other expenses. The question is whether a family's budget can support a new substantial loan alongside all the increased daily expenses," described Jonna Pechter the components currently most affecting the home loan market.
The average home loan agreement sum in March was 127,603 euros, which according to Bigbank's director reflects quite accurately the change in average purchasing power over time. "Compared to the last couple of years, the increase has been more than a fifth. If now, in anticipation of an increase in value-added tax, the share of contracts for new development homes should increase, then growth in the average loan amount can also be expected," commented Pechter.
