Interest in mortgage loans on the real estate market decreases in October

The interest of the citizens in mortgage loans declined as a whole in October, compared to the same month of last year, despite the promotions offered by some of the banks, showed an analysis of Credit Center for October 2012. According to the analysis, the main reason is the decrease in the number of good properties in the lower price segment - up to €40,000 - whose buyers are a considerable part of the borrowers. The average amount of the mortgage loans withdrawn in October was €30,271, i.e. around €1,000 less than the previous month. The share of loans in Bulgarian currency continued to increase, reaching 48% of all the mortgage loans extended during the month (the rest were borrowed in Euros).

“The demand for mortgage loans at the end of 2012 is relatively weak due to the increasing difficulty of finding properties in the lower price segment in large cities and the growing concerns of people about their financial stability,” said Tihomir Toshev, Executive Director the Credit Center. “Although real estate prices have stabilised and their decline this year is only by several percentage points, the high unemployment rate and the frozen incomes make people more cautious and they avoid excessive indebtedness,” added Toshev.

However, banks still have promotional offers and these will remain in force until the end of 2012, and some - in the first months of 2013 as well, Credit Center predicts. This means that the market is stable and promising, although it has contracted more than expected.

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