The amount of money loaned for home by Hungarian banks is down 1% year on year. Hungarian banks are not increasing rates on loans in CHF despite the increase in base rate.
The volume of housing loans taken out by Hungarian customers totaled HUF 157 bln in the first four months of 2007, a 1% decline year on year after years of robust growth, according to market research firm DEM.
Within stagnating overall volumes, the proportion of foreign currency-denominated loans continued to rise. In a related development, state-subsidized loans continued to lose significance compared to market-based (and usually forex denominated) housing loans. Subsidized loans, available to young families, now account for less than 25% of the total.
However, Hungarian banks, which have doled out record amounts of Swiss franc-denominated housing and consumers loans in recent years, are not preparing to raise interest rates on CHF loans despite yet another 25 basis point rate hike by the Swiss central bank. Banking officials say strong competition among banks and falling demand in the wake of government austerity measures are preventing banks from raising rates.
