“As interest rates rise slowly, the numbers and volumes of loans provided are declining at the same rate. However, it is still true that these declining numbers are record-breaking compared to last year’s values, “said Jiří Sýkora, mortgage analyst at Fincentrum & Swiss Life Select.
Although the mortgage market slowed down compared to August, the market is forty percent stronger in volume compared to last September, and people took out almost a quarter more mortgages. “In August, however, volumes were still growing by 75 percent year on year and numbers by more than half. Therefore, it seems that the mortgage market is slowing down the growth of interest rates, “adds Sýkora.
However, a more significant cooling of the mortgage market will probably not occur in the near future. “In the short term, however, fears of rising rates may force some households to accelerate their mortgage applications, and the volumes of mortgages provided may remain above standard despite rising rates,” said Jakub Seidler, chief economist at the Czech Banking Association. In any case, according to him, this year will undoubtedly be a record in terms of new mortgages and it will be difficult to overcome for a long time.
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Record monthly mortgage volumes, which even exceeded the 40 billion mark in the spring, are being pushed by rising rates. According to Fincentrum Hypoindex, the average mortgage rate went up from 2.32 to 2.42 percent.
“It’s just a matter of how fast it gets closer to the three percent mark. Given that today the offer rates of individual banks have long exceeded this value and are now approaching 4 percent and Fincentrum Hypoindex responds with a delay of two to three months, it is clear that the average rate of mortgages will soon attack these values, “Said Sýkora.
The upward trend in September continued at a similar pace as in previous months, which economists explain by the fact that faster-than-expected growth in interest rates by the Czech National Bank did not come until the end of the month.
“However, mortgage rates do not have to develop in tandem with central bank rates, as they respond primarily to market interest rates with longer maturities. They reflect a number of factors, not only the expected development of the CNB’s key interest rates, but also the outlook for inflation, economic development and the dynamics of similar interest rates abroad, ”adds Seidler.
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