Mortgage loans grow by 18%

The number of newly granted mortgage loans in the second quarter of 2011 was 18% higher compared to the first quarter of the year, announced experts from the Credit Center consulting company. In July, the average amount of mortgage loans increased by more than €2,200, reaching some € 40,595, up from €38,366 in June. This last figure is approaching the pre-crisis levels. According to experts, in July many Bulgarians opted for finding a new apartment rather than going on a summer vacation at the sea side.

“The activity in all segments of the property market is the reason for the increasing size of the mortgage loans.  Demand for two bedroom apartments, in the price range between €40,000 and € 60 000, remains highest, but interest in the entire price spectrum of the property market has also recovered, and obtaining credit became easier. In 90% of the transactions, buyers were able to negotiate a more attractive price of the property purchased," said Tihomir Toshev, Executive Director of the Credit Center.

Currently credits are being granted for larger apartments as well. These are purchased by buyers, who have stable income and can afford larger external financing, often reaching at 80-85% of the property value, but only if they have a clean credit history and prospects for long-term financial stability. These customers were among the main driving forces of the market before the crisis and their return on the market is a good sign. Some of them have their own home, but are now acquiring a larger, more suitable for their family property that meets their new requirements better.

According to experts from the CreditCenter, the stable, although slow growth rate indicates that the market has reversed the declining trend and will grow steadily. Customers are becoming more active, without, however, loosing their sense of responsibility and caution when making major financial decisions.

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