Mortgage and consumer loan balances rise in Romania during 2024

Total loans granted to individuals in Romania reached €37.4 billion by the end of September 2024, reflecting a 6.6% increase compared to the end of 2023. This growth, highlighted in a report by online broker Ipotecare.ro and financial consulting firm SVN Credit Romania, was driven by significant gains in both the mortgage and consumer loan segments.

The mortgage loan balance stood at €21.7 billion at the end of Q3 2024, representing a 2% rise compared to the end of the previous year, according to data from the National Bank of Romania. Mortgages accounted for 58% of the total loans in repayment across the country, while consumer loans held a 37.5% share.

Romania’s mortgage sector has seen remarkable growth in recent years. The current mortgage balance is nearly four times higher than its 2008 level, which stood at just €5.7 billion. Additionally, the share of active mortgage loans in Romania’s GDP has climbed from 3.9% in 2008 to an estimated 6.7% by the end of 2024. Despite this progress, Romania’s mortgage market remains modest compared to European averages, where mortgage balances represent about 40% of GDP.

“Continuous economic development has fueled demand for modern, more spacious homes. This has led to a transformation in the credit structure, with mortgage loans now dominating the total credit balance,” noted Alexandru Radulescu, Managing Partner at SVN Romania | Credit & Financial Solutions. He added that Romania’s mortgage market has substantial growth potential, with the possibility of doubling in size over the next decade, especially when compared to Western European markets, which are more than ten times larger.

The local mortgage market has also evolved qualitatively. In 2008, mortgage loans represented just 21% of all loans in repayment, with consumer loans dominating at 79%. Furthermore, 92% of mortgages at the time were denominated in foreign currency. In contrast, as of 2024, mortgages account for 58% of the total loans balance, while foreign currency mortgages have decreased significantly to just 12%.

The consumer loans segment, while smaller than in 2008, has also experienced recent growth. The total consumer loan balance stood at €15.7 billion at the end of September 2024, down from €21.3 billion in 2008. However, 2024 marked a strong year for consumer loans, with a €2 billion increase in the first nine months alone.

Romania’s credit landscape reflects a dynamic shift towards mortgages, spurred by improving living standards and evolving housing needs, setting the stage for continued expansion in the years ahead.