This year, the bank is feeling a steady demand for loans for both the purchase and construction of private homes, which shows that some apartment owners and tenants are ready for a drastic lifestyle and location change to get the their family’s private home, he informs SEB Ivars Golovanov, head of the bank’s private construction financing group.
The content will continue after the announcement
Advertising
From the beginning of the year to the end of September, the volume of building loans remained stable, with a slight upward trend. If we evaluate the number of loans disbursed compared to 2021, in the third quarter of this year there was an increase of 44%, but in terms of the volume of loans the increase was even 59%. This trend basically covers customers who had previously prepared for the construction of their home: they bought land and developed a house project, Golovanov says.
“Despite the rise in prices and the challenges related to the availability of some materials, people have still decided to carry out their plan to the end. A slight decrease can be expected in the fall, because it is clear that it is not possible to build a house. this year, so the works are postponed to next year, “he says.
Speaking of new loan applications, the representative of the bank says that people are interested in both financing options for land purchase and construction, they gather information on loan rates, which are raising interbank rates Euribor for the increase, and for any loan amount. “Considering that a person also needs his own financing both for the purchase of a land and for the construction of a house, many observe carefully the developments in the real estate market to wait for the right moment, for example to sell their apartment, to buy land, “concluded the bank.
The average amount that customers borrow for housing construction is around € 150,000. “When you think about your options to repay the loan, you should take into account this year’s Euribor rate increase. For comparison: if in May of this year you took out a loan of 100,000 euros for 20 years, the installment monthly would be around 500 euros, at the moment it will already be 600 euros and the increase in the Euribor rate could continue, taking into account the increase in prices in practically all areas, the monthly payment of several hundred euros, the total income of families who wanting to build a private house should be at least 2,500-3,000 euros after taxes, “Golovanov warns.
