Czech mortgage lending rose by 6.8% y/y to CZK 95.9bn (EUR 3.8bn) in 2010, equalling to 2.6% of the projected GDP, the regional development ministry said on its website. The number of provided mortgage loans increased by 15.1% y/y to 52,048. Mortgage lending to households increased by 14.8% y/y to CZK 84.8bn, as the number of contracts reached 50,775, up by 14.7% y/y. Loans to companies dropped by 28.8% y/y to CZK 10.9bn, although their number surged by 34.8% to 1,256. Loans to municipalities fell by 70.6% y/y to CZK 164mn, with the number of signed contracts decreasing by 63% to 17. Intellinews comment: The growth of both number and volume of mortgage loans to households was supported by the gradual revival of consumer demand and improvement of consumer confidence as the country starts to recover from the global financial crisis. The low interest rates and the fact that analysts expect them to soon increase, also had a positive effect on the increasing number of mortgage loans. For businesses, the lower value of drawn mortgage loans reflected the fact that the eligible for collateral assets of the companies have lost value due to the crisis and it is very hard for firms to get approval for a bank financing. The market might be seen to deteriorate again in 2011 as the planned by the government austerity measures are to hurt incomes and the central bank is expected to raise rates later in the year. |
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