The First House incentive program raises prices for old homes by up to 10%

One of the effects of the First House ("Prima Casa") incentive program aimed at helping people acquire their first home was an increase of 5 - 10 percent in the price for old homes estimated at less than 60,000 euros, according to real-estate analysts polled by NewsIn.

"Owners of real-estates that initially asked for a price of around 55,000 euros have raised it on average by 5 - 10 percent so that the properties they want to sell continue to be eligible for the program," declared the general manager of the magazinuldecase.ro real-estate portal, Matei Malos.

However, Malos says there were also situations in which owners who had an ask price of 75,000 euros decided to drop it to below 60,000 euros to enter the program.

The representatives of another real-estate portal, TopEstate, consider that owners of old homes have inched the prices up after the First House program was launched, thinking that it is easier now for buyers to get a loan from the bank.

Analysts of the Bastion real-estate agency consider that the First House program through which the state guarantees a loan of up to 60,000 euros has not yet produced any effects on the market.

But the Bastion analysts estimate the impact on the new homes market will be larger than on the market for old buildings, as a great part of those who want to purchase a house will prefer the apartments in new buildings, although they might have to come up with an additional sum of money themselves.

The general manager of magazinuldecase.ro also thinks that regarding the new homes, many developers have already offered financing for the price difference of the homes that are not eligible for the First House program.

According to analysts polled by NewsIn, the main types of homes favored by the First House program are the one-room and two-room apartments.

The government stipulated that banks granting loans through the "Prima Casa" program can demand a maximum rate of 4 percent a year above the three-month EURIBOR rate for euro loans and of 2.5 percent above the three-month ROBOR rate for lei loans.

Some 20 banks handed in offers to participate at the program. These were BCR, BRD-SocGen, Raiffeisen Bank, CEC Bank, Alpha Bank, Volksbank, Banca Transilvania, Bancpost, Banca Romaneasca, Piraeus Bank, Bank Leumi, ATEbank, Intesa Sanpaolo Bank, Credit Europe Bank, OTP Bank, Unicredit Tiriac Bank, ING Bank, Emporiki, Millennium Bank and Garanti Bank.

Those who wish to contract such a loan must not have owned a property in the past or have contracted a mortgage loan.

NewsIn