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Romania’s real estate market stands a chance to recover helped by the central bank’s amended nor

Romania's real estate market could start to feel better once the amended lending norms enter into force, but in order to see a major recovery the global markets should heal first, according to real estate consultants NewsIn interviewed.

Yesterday the central bank BNR decided to differentiate between consumer and mortgage loans in prudentiality and allow a higher degree of indebtedness of the latter, after adjusting lending norms.

Transactions will not burst all of a sudden as people are still cautious and take a lot of baby steps before going for a loan, real estate consultants with EuroMetropola told NewsIn. "The Romanian market is atypical, but it cannot overall ignore the global situation," they added.

The first buds of the relaxed lending will show this spring as for now banks have to establish their own lending criteria which should be revised by BNR before being applied.

The central bank's amended norms will impulse the market, EuroMetropola consultants said, adding that home owners need to accept the reality that prices will fail to surge to the skyrocketing values they had last year before the crisis hit the market.

Moreover, the Romanian real estate market is still short on dwellings, according to the marketing director of Romania Invest, Nimrod Zvik, who added there is still demand but not that much money.

The first step to unlock the market was made, he said. Now, people who can afford to buy an apartment will purchase it.

On the other hand, the real estate analyst Radu Zilisteanu told NewsIn that the BNR's decision to ease a bit mortgage loans will not have a big impact on the market which is faced with problems such as relatively high interests and the lack of liquidity.

"For a 100,000 euro loan the rate grew from 2,200 euros per month last year, to 4,400 this year," Zilisteanu said, adding most problems originate in the banking system.

Yet, the crisis, despite taking its toll on the real estate market, also had a positive effect of reducing the overrated prices, he added.

The central bank's board agreed yesterday to relax the lending norms adopted last summer after looking into reports on ill payments. BNR's release reads that people who guarantee loans with mortgages pay back rates in time and therefore the old rules can be amended for them.

Now banks are allowed to negotiate with their clients the level of indebtedness at each mortgage loans considering both the customers' payback capacity and their own financial resources.

The new stipulations will enter into force once published in the Official Gazette.

The set of rules approved by the central lender on August 22 last year required banks to carefully analyze the clients' payback capacity taking into account a level of incomes seen as eligible by customers, which cannot exceed more than 20 percent the previous year's level.

Banks in Romania had to ask for individual tax records of clients before approving a credit. Lenders had to establish a different maximum degree of indebtedness for each client, depending on the category of borrower, on the credit destination (mortgage, consumer etc.), on the type of credit (taking into account the currency, the interest rate, the guarantees) and also on the risks incurred by the lender, such as the exchange rate and the cost of credit.

 

Sursa: http://www.newsin.ro

Tags: amended lending romania central market estate euro bnr