However, this year will definitely not be a record for the number of pieces, said Vladimír Staňura, an advisor to the Czech Banking Association. So far, 73,000 of them have been sold so far, which is less than 90,000 for the whole year. For comparison, in the strongest year 2016, 115 thousand mortgages were sold. This year’s boom is also reflected in the average mortgage, which reached 2.865 million crowns, he noted.
“We are experiencing a huge paradox in the credit market. The data show that the coronavirus pandemic significantly accelerated people’s interest in mortgages. The total volume of provided mortgage loans will probably reach an all-time high this year, “said Štěpán Křeček, chief economist at BH Securities.
Interest in mortgages has not subsided in November either, banks report
In the first ten months of the year, banks provided mortgages worth 197.59 billion crowns. Compared to the record year of 2017, this year’s volume of provided mortgages is 11.4 billion crowns higher. Year-on-year, the volume increased by more than 52 billion crowns. In addition, unprecedented interest in mortgages has not subsided in November, according to banks. To set a record for banks, it is enough to provide mortgages worth 28 billion crowns by the end of the year.
The end of the credit moratorium has not yet been signed on mortgage rates, and due to strong competition and the persistently low price of resources, mortgage interest rates may not rise in the coming months. On the other hand, the low price of resources encourages a further slight decline in mortgage rates. The average mortgage interest rate could thus “look” below two percent in November, Sýkora estimated.
Raiffeisenbank’s director of mortgage loans, Milan Voldrich, also reminded that the increased interest in mortgage refinancing is beginning to be confirmed. While in June, purchase and construction, ie primary needs, accounted for 82 percent of all mortgages, in October it was only 69 percent. According to him, total record sales are increasingly affected by the high volume of mortgages transferred from one bank to another.
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During October, mortgages were reduced by the ČSOB Group, Air Bank, Fio Banka, Raiffeisenbank and Česká spořitelna. At the beginning of November, Creditas Bank joined them. According to the Hypoindex, only large banks Česká spořitelna, ČSOB, Komerční banka and Raiffeisenbank offer rates above two percent for five-year fixations.
The decline in the average rate is mainly due to the popularity of shorter fixations, said Bidli analyst Daniel Horňák. Clients thus choose a cheaper mortgage at the same time as a shorter fixation period. According to him, clients who are now taking out mortgages do not feel threatened in the form of loss of income, work in stable sectors, have a high income and the purchase of real estate is their security in uncertain times.
“The mortgage business is operating in a bubble today, where there is no sign of a crisis, reluctance to borrow or a significant decline in the ability to repay loans,” he said. According to ING Bank chief economist Jakub Seidler, rates began to rise again in August. However, the second wave of the pandemic sent them back to lower levels in September and October.
“However, the resurgence of vaccine market optimism has led to higher interest rates on longer maturities, which will hamper further reductions in mortgage rates, although a slight decline may occur in the coming months as mortgage rates react with some lag to market rates,” he added. .
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