Property market recovery in Bulgaria fuels mortgage lending growth

The slight revival on Bulgaria's real estate market has provided for the recovery in mortgage lending, banks active mainly in the property loan segment told Dnevnik.

The trend has been prompted by the stabilising property prices, which appear to have hit 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 per cent in the third quarter and six per cent drop compared to 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 much, depending mainly on the project’s location and infrastructure.

Sector player MKB Unionbank also considers that "the 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 further proves that the mortgage loans sector has registered the highest rise, showing a meagre 0.12 per cent monthly increase in September but a stronger 4.7 per cent in annual terms, MKB Unionbank said.

According to DSK Bank chief executive Violina Marinova, however, it was still early to define the recent trends on the market as recovery, despite customers’ growing interest in purchasing property and taking loans.

Text and photo source: sofiaecho.com

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