Czech money, banknotes, crown, house, mortgage, rent, building savings – illustration photo.
Prague – Banks and building societies provided mortgage loans for CZK 6.5 billion in January, which is a 16 percent decrease compared to December. The interest rate for truly new mortgages without refinancing fell slightly for the first time in two years, from 5.98 to 5.93 percent. This follows from the statistics of the Czech Banking Association Hypomonitor. All banks and building societies providing mortgages on the Czech market supply data to it.
“The volume of mortgages granted in January was the lowest since February 2014, but in general, the last months have been more at the levels that were common ten years ago. In terms of the number of mortgages granted, the market reached the lowest values in the last 20 years. The mortgage market is so remains frozen and its double-digit decline will continue this year as well,” said ČBA Chief Economist Jakub Seidler.
The volume of actually newly granted mortgages without refinancing reached CZK 5.4 billion in January, after December's CZK 6.6 billion . This is the lowest value since January 2014. The volume of refinanced loans amounted to CZK 1.15 billion, similar to December. The volume of actually newly granted mortgages fell by 18.7 percent month-on-month, and the year-on-year drop remained the same as in December at 80 percent.< /p>
“Although December of last year brought some hopes that there is a slight recovery in the mortgage market, the January numbers were rather disappointing for us. The mortgage market thus remains depressed and the year-on-year drop remains at a significant 80 percent. And this despite the fact that activity on the mortgage market started to slow down last year and we are no longer comparing ourselves to the extraordinary year 2021 in a year-on-year perspective,” said Jiří Zita, head of Fio bank's mortgage department.
While in December banks provided 2,300 truly new mortgages, in January it was 400 fewer. This is a lower value than in September last year, when the number of newly granted mortgages only slightly exceeded the 2,000 mark. At the same time, the average monthly number of new mortgages was around 6,000 in the first half of last year, while the year before last it even reached 9,500.
The interest rate is now slightly above last October's level, but is still at the highest levels in 20 years, although it was also at similarly high levels in 2008 and 2009. At the same time, the so-called realized interest rates, in contrast to the bid prices, reflect the actual real interest rate for signed mortgage contracts. Offer rates most often range in a relatively wide range between six and seven percent, but their average has stagnated slightly above six percent in the last six months.
The average mortgage fell to CZK 2.83 million in January, which is the lowest value from September 2020. With stricter rules from the CNB and high interest rates increasing monthly payments, some households had to reduce their intended mortgage.