The compression of the balance is lower than that in July 2008, of 2 percent, although the perspective indicates new declines for data to be reported for April and perhaps even May. “We can expect that the declines in the balance in the coming months will be comparable to those in March. New loans are being accorded, but very few. The situation is similar to four or five years ago on the mortgage market, when only a small portion of clients could access such loans. The unfreezing of loans could come in nine months,” according to a declaration for Business Standard by Dragos Cabat, President of Chartered Financial Analyst (CFA). Few banks have given mortgages, and conditions imposed, due to the cost of loans and the mandatory advance of up to 50 percent of the value of the building, are keeping clients away. The balance of housing loans amounts to €5.13 billion. Bankers are now also looking at the value of guarantees by clients, especially because the value of apartments has dropped dramatically, by 50 percent in the case of some older homes.
Demand for mortgages dropped by over 50 percent in the first quarter of 2009, compared to the middle of last year, but bankers are only approving a small portion of loan applications. While mortgages grew annually by over 60 percent last year, in March the advance was half, at 34 percent. Although bankers have come onto the market with offers to tempt Romanians to apply for financing, the latter are no longer clambering for consumer loans, compressing these 1.6 percent, to €17.70 billion, while the February balance advanced modestly, by 0.27 percent. In their turn, banks are unwilling to provide consumer loans without guarantees, as unguaranteed loans made up about half of total loans accessed by Romanians for consumption. The default rate is highest for unguaranteed loans. The arrears of the population in excess of 30 days soared 18 percent in February, to €308 million.
