Banks in the Czech Republic granted mortgages worth an estimated CZK 138 billion last year, CZK 25 billion less than in 2022. The volume of loans from building savings fell by CZK 20 billion to CZK 34 billion. Martin Vašek, CEO of Hypoteční banka and ČSOB stavební spořitelna, said at a press conference today. According to the group’s estimates, prices of flats and houses fell in the fourth quarter of last year, while land prices rose. Hypoteční banka from the ČSOB group is the leader of the domestic mortgage market.
According to Vasek, despite tougher market conditions, banks provided housing loans worth CZK 172bn to households last year, up from CZK 217bn in 2022.
“Client demand was dampened mainly by strong year-on-year growth in average interest rates, slightly falling property prices and rising prices of goods and services due to high inflation, which resulted in a decline in the purchasing power of the population. However, inflation and market interest rates are likely to decline this year, and as a result, a further slight recovery in housing loans can be expected,” said Vasek. The situation improved significantly in the second half of the year,” he said.
While in the first quarter the volume of mortgages was CZK 24 billion, in the second quarter it was CZK 33 billion, in the third quarter it was CZK 36 billion and in the fourth quarter it was CZK 45 billion, added Miroslav Zetek, deputy chairman of the board of directors of Hypoteční banka. He expects further growth this year, especially due to the fall in inflation, the reduction in interest rates and the abolition of the mortgage lending rule. Since January, banks no longer have to apply a cap on the maximum amount of an applicant’s total debt relative to his or her annual income (DTI).
In the fourth quarter of last year, flats in the Czech Republic became cheaper by about 6.2 per cent year-on-year and family houses by less than one per cent, according to estimates by the ČSOB Group. Land prices, on the other hand, rose by 7.6 per cent. In 2024, Zetek expects further growth in real estate prices. ČSOB will present specific values for the fourth quarter in February.
ČSOB Stavební spořitelna started subsidy consulting for the New Green Savings Programme (NZÚ) in January and will start offering loans for energy-saving measures to applicants in the NZÚ subsidy programme ‘Fix your grandmother’s house’ in February. “Interest on the loans will be no more than half the CNB rate for unsecured home loans, which currently works out at around 3.5 per cent. In addition, there is no need for collateral and the repayment period is up to 20 years, which has a very positive effect on reducing the monthly repayment,” said Ladislav Neuhäuser, a member of the board of directors of ČSOB Stavební spořitelna.
Last year, the ČSOB Group provided CZK 39 billion in mortgage loans and CZK 7 billion in building savings loans to clients. ČSOB is part of the international banking and insurance group KBC, which operates in Belgium and Central and Eastern Europe.
Source: ČSOB and CTK
