Housing loans increase, after three-month dive

  • ECO News
  • 11 December 2018

Banks granted €811m on new housing loans, in October. An increase of €22m in comparison to September and a €105m year-on-year jump.

Housing loans are increasing again, after three months of a stoppage promoted by the Bank of Portugal. In October, credit concession for housing loans went up by €22m in comparison to September, and increased by €105m year-on-year.

The data was released by the Portuguese Central Bank (BdP), this Tuesday, and it shows that a total of €811m were granted for new housing loans in Portugal.

This is much higher than the €22m registered in September, and if compared with last year, there was a 15% or €105 m increase in housing loans. This value is the highest recorded in the last eight years.

During the first ten months of the year, the accumulated value for housing loans stood at €8.1bn, the highest value recorded since 2010. In comparison to last year, the amount granted increased by 21.7%.

From September to October there was a break in the downward trend witnessed in the previous three months. In July, August and September, 919, 810, and 790 million euros were, respectively, granted for housing loans in the country.

These reductions occurred as the recommendations from the BdP came into force in July, asking the banking system to limit credit concession in order to avoid situations of over-indebtedness.

However, the Banking regulator has now recognized that their recommendations were all being followed by the banking system, in their report released this month of December. In their first evaluation of the implementation of the rule, they report that “there are improvements in the evaluation of solvency”.