SVN Romania Credit Report: Mortgage market, up 29% in the first quarter of 2024

New mortgage loans worth approximately EUR 1.1 billion were granted nationally in the first three months of 2024, up about 29% compared to the level registered in the first quarter of 2023, according to a market report released by financial consultant SVN Romania | Credit & Financial Solutions. Refinancings, conversions, transfers and restructurings were excluded from this volume.

In total, reports released by National Bank of Romania indicate a total volume of mortgages granted in Romania in the first quarter of this year of EUR 2.15 billion, up 95% compared to EUR 1.1 billion registered in the first quarter of 2023, this volumes including also refinancings, conversions, transfers, and restructurings.

„The local mortgage market has been in a strong recovery for several months now, also corroborated with the increase in the number of homes sold, which was of almost 19% in the first three months of this year compared to the similar period from 2023. Considering the results from the first quarter of this year, 2024 will be a year with a strong revival, preparing the ground for a 2025 that could bring a new record of mortgage loans granted, depending on the size of the housing stock for sale and the local macroeconomic evolutions. Consumer confidence returned to a good level and interest rates follow a continuous downward trend”, commented Alexandru Radulescu, managing partner SVN Romania | Credit & Financial Solutions.

The growth of the local mortgage market from the first months of this year was registered in a context in which fixed interest rates – which hold the majority in terms of the mortgage loans type contracted in 2024 – registered new decreases. Thus, the 5% threshold was ‘broken’, the best current mortgage offer with a fixed interest rate being of 4.9% a year.

SVN Credit Romania consultants estimate that variable interest rates will also decrease, most likely in the last quarter of this year, without registering a significant level of decrease – thus, fixed interest rates will remain the most advantageous in the next 12 months.

”For those with a mortgage loan with variable interest rate who have not refinanced so far, this could be the last possible train to take this step. IRCC will decrease, but not with the expected level, so fixed interest rates will continue to be more attractive, borrowers being able to return to variable interest rates in the future, through a refinancing, when they become advantageous again”, added Alexandru Radulescu.

NBR data show that a total of EUR 6.4 billion mortgages were granted in 2023. SVN Credit Romania estimates that new mortgages had a value of approximately three billion, or about 46% of the total registered volume.
The average mortgage loan granted at a national level in 2023 had a value of about EUR 62,000, while the average price of a property traded through a mortgage loan in 2023 was EUR 85,000, up from EUR 82,000 in 2022, according to SVN Credit calculations. In total, approximately 48,000 new mortgage loans were granted in Romania last year, compared to a level of approximately 55,000 new mortgage loans granted in 2022.

SVN Romania | Credit & Financial Solutions is one of the most important mortgage brokers in Romania, with a volume of EUR 91 million mortgages brokered in 2023. The company has four offices in Bucharest and 10 in the country, in Arad, Bacau, Brasov, Cluj – Napoca, Constanta, Oradea, Ploiesti, Sibiu, Timisoara and Targoviste. SVN Romania is one of the biggest real estate consultants active on the local market and the company with the most extended activity on the residential segment.