According to official statistics from the Association of Czech Building Societies (AČSS), the volume of loans from building societies increased by 30 percent year-on-year and the number of new contracts by 10 percent.
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“Given the past months and the sudden epidemic situation that has also affected the financial markets, the results of building savings to date are excellent. Credit transactions are even approaching the record level of 2018, “said Jan Jeníček, Chairman of AČSS.
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The savings crisis has helped
During the spring wave of the coronavirus pandemic, many people realized the importance of creating a financial reserve. Some Czech households lost part of their income due to government measures and in practice found out how significantly this situation can affect the family budget when there is nothing to draw from.
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The crisis did not even affect the termination of contracts. According to data from building societies, people have terminated even slightly fewer contracts this year than usual in the last five years. The contracts were most terminated in 2016, more than twice as much as this year.
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Savings banks have already lent a trillion crowns
A big milestone also fell in August, when the total volume of loans provided by building societies since the beginning of the building’s existence in 1993 reached the amount of a trillion crowns.
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“For a trillion crowns, today and at today’s prices, you would buy about 170 thousand average flats in Prague and about 558 thousand flats in Ostrava,” said Jiří Šedivý, secretary of AČSS. For the “Ostrava” price, you could buy apartments in the entire Moravian-Silesian region, and you would still have a few billion crowns left.
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“The price of flats in the Czech Republic has risen by about 140 percent in the last 15 years, so in 2005 less than half of today’s amount was enough for an flat,” added Šedivý.
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Loans mainly for reconstructions
People borrow various amounts – several tens of thousands of crowns, which they will use for the reconstruction of their housing, but also millions for the purchase of apartments or houses.
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Overall, however, renovations are the most common reason why people borrow from building societies – in about 45 percent of cases. The purchase of real estate accounts for 27 percent of provided loans.
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In total, over 2.54 million loans have been provided since 1993, the average loan for the entire history of the building has reached the value of almost 400 thousand crowns. Bridging loans have become a phenomenon in the Czech Republic, which will help solve a situation where the client is not yet entitled to a proper loan, but needs the money for the dream housing immediately.
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The fact that Czechs still have little thought about financing their housing well in advance is also proved by the fact that 83 percent of loan cases in building societies have just started by bridging.
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