Data from the Bulgarian National Bank (BNB) released today reveals that the number of granted mortgage loans increased by 16.5% in the first two months of 2011 compared with the same period in 2010.
The increase is accompanied by a drop in average interest rates in January and February 2011, to a level that is approximately 1 percent lower than in the same period last year. Since the second half of 2010 the average interest rates for mortgage loans in BGN and Euro are between 7.8% and 8.5%. According to BNB’s data for February the average interest rate in BGN is 8.32% and in Euro it is 8.13%, while a year ago these figures were 9.31% and 8.49% respectively.
After an increase of 11% in credit activity in January compared with the same month in 2010, the volume of granted mortgage loans continued to increase in February as well, by 21% compared with February 2010. The volume of mortgage loans in BGN in the first two months of 2011 decreased by 21% while the granted mortgage loans in EUR increased by 32%.
In 2010 there was an increase of 8.9% in mortgage loans compared to 2009 when the banks’ mortgage activity dropped by 62.6% of the peak values in 2008. In 2010 mortgage loans amounted to 1.9% of Bulgaria’s nominal GDP, while in 2009 they made up 1.8%, following a high of 4.6% in 2008.
The increase in the number of mortgage loans, together with the drop in average interest rates, the increase in the foreign direct investments (FDI) to Bulgaria in January compared to a year earlier and the country's continuing economic recovery all combine to give out positive signals for the real estate market. What still has a drag effect on more rapid recovery, though, is the high unemployment rate and people’s feelings of insecurity.
The increase is accompanied by a drop in average interest rates in January and February 2011, to a level that is approximately 1 percent lower than in the same period last year. Since the second half of 2010 the average interest rates for mortgage loans in BGN and Euro are between 7.8% and 8.5%. According to BNB’s data for February the average interest rate in BGN is 8.32% and in Euro it is 8.13%, while a year ago these figures were 9.31% and 8.49% respectively.
After an increase of 11% in credit activity in January compared with the same month in 2010, the volume of granted mortgage loans continued to increase in February as well, by 21% compared with February 2010. The volume of mortgage loans in BGN in the first two months of 2011 decreased by 21% while the granted mortgage loans in EUR increased by 32%.
In 2010 there was an increase of 8.9% in mortgage loans compared to 2009 when the banks’ mortgage activity dropped by 62.6% of the peak values in 2008. In 2010 mortgage loans amounted to 1.9% of Bulgaria’s nominal GDP, while in 2009 they made up 1.8%, following a high of 4.6% in 2008.
The increase in the number of mortgage loans, together with the drop in average interest rates, the increase in the foreign direct investments (FDI) to Bulgaria in January compared to a year earlier and the country's continuing economic recovery all combine to give out positive signals for the real estate market. What still has a drag effect on more rapid recovery, though, is the high unemployment rate and people’s feelings of insecurity.
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