Bigbank: The Number of Home Loan Contracts Continued to Grow in August
Since spring, the continuously growing number of home loan contracts grew even further in August, being 10% higher than in July and as much as 60% higher than in August of the previous year, according to Bigbank's loan portfolio analysis.
According to Jonna Pechter, Head of Bigbank Estonia, the past couple of months have also been active in the Tallinn apartment market. "First and foremost, the number of applications made a clear jump, and since spring, many people have been, so to speak, back on the market and ready to buy a new home. Now in July and August, we have increasingly reached actual transactions, that is, purchasing new homes," commented Jonna Pechter, Head of Bigbank Estonia. From the perspective of real estate market trends, market participants' expectations for continued interest rate decline are important, and as a significant milestone, the 12-month Euribor recently fell below 3% for the first time in the past couple of years.
The average loan amount, which has jumped significantly in recent months, fell to 127,568 euros, which according to Jonna Pechter is nonetheless approximately twenty percent higher than the corresponding figure from the previous autumn-winter. "Broadly speaking, the decline in real estate prices that was predicted a year and a half ago has not occurred, and in the future, prices will inevitably rise slowly along with the growth in input prices of new development projects," described Bigbank's head the future prospects for home buyers.
"What is clear is that the pent-up demand has not disappeared anywhere, and along with falling interest rates, one can expect continued growth in the home loan market in the autumn, especially compared to the same period of the previous year," said Jonna Pechter, optimistic about trends, and emphasized that the lion's share of contracts have been concluded for home purchases. "Although many families have also refinanced their previous contracts in light of more favorable offers, such contracts remain within the range of a tenth of the total volume of newly concluded home loan contracts," added Bigbank's head.
Bigbank AS (www.bigbank.ee) is a bank based on Estonian capital, focused on loans and deposits for private and business clients, which in addition to operations in Estonia has branches in Finland, Sweden, Latvia, Lithuania, and Bulgaria, and offers its products also in Austria, Germany, and the Netherlands as a cross-border service. Bigbank's balance sheet total is over 2.5 billion euros, of which the business loan portfolio accounts for over 600 million euros.
