The volume of debt from mortgages and building savings loans increased by CZK 383 billion year-on-year, while debt from consumer loans increased by CZK 23 billion, data showed. The year-on-year increase in debt was three times higher at the end of this year’s first quarter than at the end of 2019. At the same time, it reached its peak.
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According to Lenka Novotná, Executive Director of the Banking Register, the number will not be so high in the coming quarters. According to her, the reason is the weakening demand for housing loans, which began to manifest itself more markedly during April.
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According to data, debt from mortgages and building society loans increased by 17.6 percent throughout the Czech Republic. For example, it increased by 19.4 percent in Prague and by 19.1 percent in the South Moravian Region. The reason is, among other things, the ever-increasing real estate prices in large cities.
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The volume of debt from consumer loans increased by five percent year on year. This is the largest year-on-year increase since the end of 2019, ie since the last quarter before the pandemic broke out. Over the last two years, debt on consumer credit has stagnated or even declined.
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“People have started to return to their previous consumption habits, stopped saving and started borrowing more for less. In terms of client behavior, the pandemic period, which was characterized by extreme interest in mortgages and low interest in consumer credit, is slowly coming to an end,” he said. Director of the Non-Banking Register Jiří Rajl. Some people use consumer loans as a supplement to mortgages.
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Decrease in outstanding debt
The volume of outstanding debt reached CZK 28.1 billion at the end of the first quarter, and thus decreased by CZK 1.8 billion year-on-year. Of this, CZK 22.5 billion was outstanding debt on consumer loans and CZK 5.6 billion was debt on housing loans. People did not repay 4.4 percent of consumer loans and 0.2 percent of what they borrowed for housing.
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During the first quarter, the trend of the last few years continued, which is characterized by a decline in outstanding debt in a situation where the total indebtedness of the population is growing significantly.
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“However, we assume that this situation will start to change during this year. Many people will repay several thousand crowns a month more after refixing their mortgages, and other costs, such as the price of heat or food, will increase significantly,” Rajl said.
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