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The increase in interest does not stop loans/ Conditions are tightened, but borrowing is increasing

2023-02-26 21:55:02Biznes SHKRUAR NGA REDAKSIA VOX
The increase in interest does not stop loans/ Conditions are tightened, but
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In the last 6 months of the year, the reports of the Bank of Albania show that lending conditions have tightened, while the interest on home purchase loans increased to 4.5% during the July-September period from 3.8% at the beginning.

They continued to grow in the last quarter of 2022.

However, these indicators are not stopping the increase in housing prices, nor the increase in the loan portfolio, which is being stimulated by receiving loans in euros. Real estate experts explain the reasons

"On average, up to 1.5% has been reflected in mortgage loans, the increase in the basic interest rate by the Bank of Albania, making sure that we do not have a cooling of the market. There have been several other financial sources that have fueled the market. One was the increased lending, the second was the share of foreign investors and the third was remittances, which increased from 761 million euros to 841 million euros", says Reinaldo Pipirea.

Regarding the fact that housing prices have increased several times over the years than average salaries, experts think that they remain affordable.

"As long as the banking sector has supported this market with loans with fixed interest rates in the first two years and an average interest rate of 4.2%, we are still at the level where buying a house can be afforded. But we must be responsible that the Albanian economy also has its informal part, just like any economy in the region. In these conditions, when we have a part of the gray economy, we cannot make a direct comparison with the average wages", explains Pipirea.

The Bank of Albania states that perceptions from the banking sector have increased that the demand for mortgage loans will decrease in the coming periods, while problems with installment payments have also been observed among low-income groups./Tch


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