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Families are asking for more housing credit to buy a house



The number of new home loans in Portugal has been recovering as interest rates fall. This trend is being felt by Portuguese banks, which expect a “slight increase” in demand from families for home loans to continue until the end of 2024, according to the Bank of Portugal (BdP).


The results of the latest Bank Survey on the Credit Market by the Bank of Portugal (BdP) were released this Tuesday, October 15. They reveal that banks felt a “slight increase in demand in the housing segment” in the third quarter of 2024, the document reads. More data from the BdP confirms this, revealing that new home loans amounted to 1.545 billion euros in August, which is “the highest value since March 2022”.


But why did this happen? “The regulatory and fiscal regime of the housing market and, to a lesser extent, consumer confidence contributed slightly to the increase in demand for loans for home purchases” in the summer of 2024, explains the regulator led by Mário Centeno. Therefore, behind this greater interest in home loans is, for example, the reduction in interest rates on new home loans (the average rate fell to 3.43% in August, according to the BdP) and also the exemption from IMT and IS on home purchases by young people, which came into effect on August 1.


Banks' expectations until the end of 2024 are also encouraging, as a “slight increase in demand in the housing segment” is expected, a trend that may be related to the interest rate cuts expected for the coming months, as the European Central Bank (ECB) eases its monetary policy (the next ECB interest rate cut is expected for this Thursday, October 17).


As for the supply of housing loans, the BdP reveals that, in the summer of 2024, the criteria for granting loans remained “practically unchanged” in the segment for individuals to purchase housing – and should remain so until the end of the year. Even so, it admits that there were “slightly more restrictive conditions regarding the maturity of loans for the purchase of housing” and also a “slight increase” in the proportion of applications for home loans rejected this summer.


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Source: Idealista


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