During the months of July-September, at least 13 percent more residential loans were taken out in Flanders than in the same period last year. During the third quarter of 2018, 62,500 mortgage loans were concluded for a total amount of just over 8.5 billion euro. Refinancing is not included in this figure.
This is an increase of 13 percent in the number of housing loans granted by financial institution, compared to the third quarter of last year. The amount borrowed was 18% higher than in the same period of 2017.
These statistics on mortgage credit were published today by the Professional Association of Credit (BMS).
“The low interest rates continue to have a strong effect on the increase in applications for new housing loans and on the lending itself,” says Ivo Van Bulck, secretary-general of the Professional Association of Credit.
But there is another explanation: the reduction of registration duties, as of 1 June of this year, for the purchase of a house in Flanders. This impending tax reduction led many prospective buyers to wait until the third quarter to seal the deal and take out a loan. “The wait-and-see attitude of the consumer in the second quarter was fully compensated in the third quarter,” says Van Bulck. “In the third quarter, 12.3 billion euro of new loan applications were made,” he adds.
The average amount borrowed for the purchase of a house rose further in the third quarter, to almost 160,000 euros. The average amount for a loan to build a new home fell slightly to about 170,000 euro. The average amount of a loan for a purchase and renovation rose sharply to 197,000 euro.
Approximately 7 out of 10 borrowers opted for a fixed interest rate or a variable interest rate (with a fixed rate for a minimum of 10 years). Loans with an annual variable interest rate remained stable at around 8 percent of the total.
Arthur Rubinstein
The Brussels Times
