Surge in Home Loans Sets New Record in Bulgaria

Bulgaria has witnessed a remarkable surge in home loans at the beginning of the year, with loans for households for the purchase of houses and apartments reaching a record high of BGN 20.52 billion by the end of February, according to data from the Bulgarian National Bank (BNB). This represents a staggering growth of over 22 percent compared to the previous year, marking an unprecedented expansion in housing loans.

The significant increase in mortgages can be attributed to several factors. Firstly, there is a growing demand among individuals to upgrade to larger or more desirable homes. Additionally, many people are looking to invest their savings in real estate but lack the necessary funds to make a purchase outright. As a result, they turn to bank loans to finance their property investments. The prevailing low interest rates on home loans serve as an additional incentive for prospective homebuyers, fueling further growth in the housing market.

Consumer loans have also experienced a substantial uptick, growing by more than 13 percent year-on-year to reach BGN 17.2 billion by the end of February. A significant portion of these loans is directed towards home renovations, as well as the purchase of furniture and household appliances. Evidently, the desire for improved living conditions remains a driving force behind the surge in bank lending across the country.

Interestingly, households are borrowing significantly more than businesses, with loans to households growing by 17.1 percent over the year to reach BGN 39.4 billion. In contrast, business loans saw a more modest increase of 8 percent, totaling BGN 44.8 billion by the end of February.

In addition to increased borrowing, households are also bolstering their savings in banks. Over the past year, deposits from citizens surged by BGN 7.85 billion, marking a notable increase of 10.8 percent to reach BGN 80.8 billion. Meanwhile, deposits from non-financial enterprises grew at a slower pace, increasing by only BGN 2 billion or 5.1 percent to reach BGN 43 billion.

econ.bg

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!