2007 was a top year for mortgage banks
2007 showed a record 50% growth in newly provided mortgage loans in the Czech Republic.
Ceska sporitelna and Hypotecni banka, the largest mortgage banks on the Czech market, together lent over Kc85bn in mortgage loans last year, and according to estimates of experts, all banks active on the domestic market provided Kc150bn in mortgage loans last year. The average size of a mortgage loan in the country rose to Kc1.7m in the year.
The volume of loans provided by Raiffeisenbank last year more than doubled to Kc21.4bn. Hypotecni banka lent over Kc40bn to clients, over 50 percent more than in 2006. Hypotecni provides loans also to clients of the banks CSOB and Citibank.
Ceska sporitelna provided Kc45.4bn worth mortgage loans, over a quarter more than a year earlier.
“High interest in new housing and mortgage loans will certainly last in the coming years. Last year’s 50 percent growth dynamics were extreme, though. In 2008, seen the huge base, we expect roughly a 10 percent growth,” Hypotecni banka CEO Jan Sadil estimated.
A gradual growth in interest rates will most likely act against interest in taking a mortgage loan. Some estimates put the growth in instalments at Kc2,000 a month compared with the previous years.
Mortgage banks provided over 319,000 mortgage loans for more than Kc434bn to people from the start of their activities in mid-1990s to September 2007.
Mortgages are also contributing to the growing household debt. Czech National Bank (CNB) data show that Czechs owed nearly Kc700bn to financial institutions to end-November 2007, up Kc173bn year-on-year.
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