Bank-fi­nanced prop­erty trans­ac­tions rise a notch

Lenders funded more home sales in Q3 than in pre­vi­ous quar­ter

Kathimerini English - - Front Page - BY NIKOS ROUSSANOGLOU

The last few months have seen a sig­nif­i­cant im­prove­ment in fund­ing from banks for prop­erty trans­ac­tions, ac­cord­ing to the lat­est Bank of Greece data.

In the year to end-Oc­to­ber the share of house or apart­ment trans­ac­tions with the con­tri­bu­tion of bank loans grew to 20 per­cent, while in the first half of 2014 that rate had not ex­ceeded 15 per­cent and last year it had stood at 17 per­cent. A small in­crease was also recorded in the av­er­age rate of bor­row­ing, which amounted to 35 per­cent of the full value of prop­er­ties pur­chased, up from 33 per­cent in the Jan­uary-June pe­riod.

Th­ese rates re­main far be­low those recorded in 2009, when the av­er­age share of loans reached 70 per­cent of prop­er­ties’ value, with the ruse of ad­di­tional con­struc­tion loans of­ten tak­ing the fi­nanc­ing rate up to 100 per­cent. Banks par­tic­i­pated in 82 per­cent of trans­ac­tions at the time.

Still, this lat­est de­vel­op­ment con­sti­tutes one of the pre­cious few pos­i­tive in­di­ca­tions re­gard­ing the fu­ture course of the hous­ing mar­ket that has not only been harmed by the eco­nomic cri­sis and its con­se­quences but also by the ab­sten­tion of banks from is­su­ing new loans. Soar­ing non­per­form­ing loans and un­cer­tainty over their set­tle­ment are hold­ing up any fur­ther im­prove­ment in prop­erty mar­ket fund­ing con­di­tions, de- spite the sig­nif­i­cant buy­ing op­por­tu­ni­ties emerg­ing in com­par­i­son with the re­cent past.

The small in­crease in the credit sys­tem’s par­tic­i­pa­tion in fund­ing may help bank-fi­nanced trans­ac­tions bot­tom out next year after reach­ing an es­ti­mated 16,000 this year. That com­pares with 148,100 trans­ac­tions seven years ago, which shrank to 30,900 in 2012 and 23,800 in 2013. A sig­nif­i­cant share of this year’s trans­ac­tions funded by banks do not con­cern new loans but val­u­a­tions for the re­fi­nanc­ing of ex­ist­ing loans.

In the third quar­ter of the year banks par­tic­i­pated in 4,219 trans­ac­tions, against 3,488 in the sec­ond quar­ter, and down from 4,493 trans­ac­tions in the third quar­ter of last year.

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