Mortgages decline in July

The real estate market deadlock brought a 12 percent decline in mortgages in July. Loans amounted to €4.7 billion, according to data from Romania's National Bank. The new loans volume in foreign currency was not able to cover the reimbursements for July, although bankers expected an more clients, since there is only one month left until harsher lending rules are enforced.

The balance of loans granted by banks amounted to some €50 billion in July, 0.34 percent higher month-on-month. The enforcement of lending restrictions for individuals as of October, higher costs for a loan and the effect generated by a hike in loans in 2007 could lead to an overall 40 percent increase to non-government loans in 2008, below advances posted in previous years, exceeding 60 percent.

"Lending would have slowed even without the new conditions imposed by the National Bank, because it is hard to maintain the growth rate posted in previous years, when lending conditions were relaxed," said Raiffeisen Bank's macroeconomics research department chief, Ionut Dumitru.

Business Standard