Eurozone banks have relaxed the conditions for obtaining mortgage loans

This is the first time since 2021, while the decline in inflation gives hope of an imminent rate cut by the ECB.

Is there an end to the crisis in sight for the stone sector? According to the ECB report published this Tuesday, April 9, signals within euro zone banks are improving. In fact the latter has relaxed its conditions for granting grants real estate loan in the first quarter, for the first time since 2021, while the decline in inflation gives hope of an imminent rate cut by the ECB.

According to the study, based on a questionnaire sent to 157 establishments, the net percentage of banks that relaxed their norms in the last quarter of 2023 was 6%, while 2% tightened them.

Improved “bank risk tolerance”

The ECB estimates that improved risk tolerance among banks has contributed to this easing in real estate.

For business loan, lending conditions have experienced greater stringency. However, according to the ECB, the latter is “mild” and much less significant than anticipated by banks in the previous report.

For the second quarter, banks expect “moderate net tightening in business loan terms” and “unchanged loan terms for household loans” in both real estate and consumption sectors.

Morning Brief: Real Estate Credit, Reduction in Individual Contribution - 02/20
Morning Brief: Real Estate Credit, Reduction in Individual Contribution – 02/20

Real estate market is under pressure

rate increased The institution has significantly tightened lending conditions in recent years to curb inflation in the euro zone through July 2022.

This policy has hit households who wanted to borrow to acquire housing, depressing the market in many European cities and slowing economic activity for businesses.

But inflation has since fallen, even coming close to the medium-term target of 2% set by the ECB with 2.4% in March, raising expectations of the institution’s monetary policy easing in the coming months. Is.

The ECB’s Governing Council is expected to mark the ground ahead of an interest rate cut expected from June during its monetary policy meeting on Thursday.

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