Banks and building societies in the Czech Republic have provided mortgages to households in the amount of CZK 18.2 billion (€719 million) in March 2024. The volume of mortgages granted has increased by 15.5% month-on-month. The above information comes from the data of ČBA Hypomonitor, capturing data from all domestic banks and building societies providing mortgage loans.
However, double-digit month-on-month growth is quite typical for March, and after taking traditional seasonality into account, the volume of mortgages provided was mostly stagnant. From a year-on-year perspective, the effect of the higher comparative base from last March, when the volume of mortgages increased significantly month-on-month, is starting to show. Thus, year-on-year growth reached 50% in March and decreased from 100% in February. However, compared to March 2020, the volume of mortgages provided was still almost 20% lower.
The average mortgage rate for new loans continued its faster decline in March, falling to 5.19% from 5.36% in February, which is still the lowest since June 2022. Bid rates have also gained significantly as a result of recent developments in market interest rates below the 6% threshold and in limited cases offers below the 5% level also appear.
The volume of actually newly granted mortgages without refinancing reached CZK 15.4 billion (€608 million) in March, after February's CZK 13 billion (€513 million). The number of newly granted mortgages reached 4,490 in March, which represents an almost 17% month-on-month and 30% year-on-year increase. However, compared to March 2020, the number of mortgages is 30% lower. The average monthly number of new mortgages last year was slightly below 3.4 thousand, while in 2020 it was around 6.7 thousand and in the exceptionally strong year 2021 it reached 9.5 thousand.
Mortgage rates react with a delay of several months mainly to the development of market interest rates of longer maturities. A number of factors are reflected in them – not only the expected development of CNB base rates but also the outlook for inflation, economic development and the dynamics of similar interest rates abroad.
"The current data confirm the positive recovery of the market. We see continued year-on-year growth in interest in buying real estate, the gradual trend of increasing interest in cost-effective housing is proving interesting. For example, we see in our data that one in three mortgages from newly closed ones finance low-energy houses and apartments. The same reasons, i.e. financial savings, are leading more and more people to renovate and modernize real estate in order to reduce their energy consumption," says Martin Vašek, CEO at Hypoteční banka.
