Property market recovery in Bulgaria fuels mortgage lending growth

The slight revival of Bulgaria's real estate market has started moving mortgage lending, banks active mainly in the property loan segment said, quoted by Dnevnik. The trend has been prompted by the stabilising property prices, which already hit the rock bottom, thus encouraging clients to stop awaiting further drops and to resort to bank loans, according to market players.


Property prices declined 1.2% for July to September in quarterly terms, but marked a 6% drop compared with the same period of 2009, statistics data showed. The recovery in mortgage lending has also been fuelled by the lower interest rates on credits. According to UniCredit Bulbank CEO Levon Hampartzoumian, the country's property market has started to witness fresh deals, with prices not likely to decline sufficiently, depending mainly on the project’s location and infrastructure.


Sector player MKB UnionBank also considers that "property market is starting to rouse, which is also evident from customers' behaviour, who are increasingly interested in banks' offers for financing."
In addition, data of the Bulgarian National Bank (BNB) further proves that mortgage loans have registered the highest rise, showing a meagre 0.12% monthly increase in September but a stronger 4.7% growth in annual terms, MKB UnionBank added. According to DSK Bank chief executive Violina Marinova however, it is still early to define the recent trends on the market as recovery, despite customers’ growing interest in purchasing property and drawing loans.

News source: Dnevnik a.m. link:article