Housing Loan Trend to Watch For in 2019
TIRANA, August 16
The individuals have received around €100 million credits for their houses in the first half of 2019. According to data by the Bank of Albania, housing loan is in increase even this year. Between January-June 2019, the banking system has given Lek12.3 billion new credits for this purpose. Compared to the first half of last year, the new credit for the purchase of housing has increased by 8%. In the last two years though, this service is leaning more towards the local currency, Albanian Lek. In the first half of 2019, 58% of housing loan was given in Lek.
For more than a decade, the housing loan was dominated in the Euro currency, favored by the low norms of interests, and the aggressive politics of the banks with foreign capital, which encouraged considerably the credit in European currency. But, in the last years the decrease of norms of interests for Albanian Lek, has made this product more appealing in the local currency. Bank of Albania encourages all the individuals to receive their credits in the currency that they receive their income, avoiding the risk that comes with the currency exchange. In general, the low norms of interests are favoring the credits for housing purchases.
Many families have chosen to benefit from the low prices of the credits to buy a house or apartment. The offer by the banks for this product seems very favorable, in an attempt to raise the volume of the business in this segment. Because of the long-term maturity, the loan for a house offers a sustainable increase in time, for the credit portfolio, but as well for a better distribution of the risk. This product, has the lowest rapport of the bad credits in the banking system this year, approximately 5%.
In total, the credit portfolio for housing purchases from the banking system in the middle of this year had the value of Lek113 billion or €925 million. Bank of Albania predicts that the loans granted for a house purchase will be higher in the third Q1 of 2019 (July-September), urged by the higher need for the fund, of the consumption, as well as housing purchase.