Housing loans grow more rapidly than before crisis

Slovak banks in 2014 recorded dynamic growth in mortgages, which was even higher than during the pre-crisis years of 2007, stated the Slovak National Bank (NBS) in the latest issue of its Biatec magazine. The growth of housing loans last year was also higher compared to other EU countries. "The average growth of loans last year in Slovakia was the highest in the EU. Nevertheless, when it comes to the ratio of households' debts to final consumption, Slovakia is still one of the least indebted EU countries," writes the Biatec. The National Bank points out that last year's growth dynamics was due to a reduction in interest rates (which was the most significant in the EU), growth of salaries, and improvement on the labour market in Slovakia. At the same time, Biatec notes that Slovaks are on the top positions on the list of EU countries in being actual owners of the property in which they live. One disturbing element is that the average ratio of housing loans compared to the relevant property has been increasing as of late. Also, the current low interest rates alter banks' perception of risks. According to the National Bank, financial houses should be more cautious in approving loans with regard as to whether the customer will be able to pay the loan long term.