Home loans reach record in March 2019
The Portuguese borrowed a record €2.35Bn in mortgages from banks and credit lenders in the first three months 2019.
The figures released from the Bank of Portugal show that despite an overall modest slowdown in the economy there seems to be no let up in taking out home loans despite recommendations last year from the Bank of Portugal to the nations banks to show more prudence over lending.
The latest figures are a record not seen since the same period in 2010, and according to the central bank led by Carlos Costa, the nations banks lent €870 million for home loans — a new high after two consecutive months of falling demand from potential buyers.
The total amount for the quarter in mortgages from all credit sources was €2.351Bn, a growth of 7.55% on the same period in 2018.
One would need to go back nine years to the first quarter of 2010 to see a higher amount of home loan lending. At that time the credit market lent out €1.734Bn.
Nevertheless, the like-for-like increase of 7.55% is a far cry when compared with the 21.24% figure registered for the same period in 2018.
The overall slowdown could be the result of stricter voluntary controls introduced by the Bank of Portugal on credit concession recommending that the banks take more prudent account of the ability to pay not only at the time the mortgage is taken out but also in the event of future unexpected circumstances such as unemployment or ill health and injury.
These bank recommendations from the central bank which have been in force since July 2019 are based on three types of limits that should be taken into account at the time of deciding if the mortgage goes ahead of not with a view to minimising the risk of default.