2023-10-23 09:43:14
The fall continues in the mortgage market. Credit demand fell by 15.5% in the third quarter and the number of grants plunged by 29%.
As in previous quarters, demand for real estate loans remained very weak in the third quarter of 2023. It fell by around 15.5%, excluding refinancingcompared to the third quarter of 2022, according to figures from the Professional Credit Union (UPC).
The number of grants of credits inevitably follows this trend and fell by 29%, excluding refinancing. The amount of credits granted decreased by around 31% compared to last year. Approximately 43,500 credits were thus granted for a total amount of just over 7.2 billion euros.
The average amount borrowed for the purchase of housing stabilized in the third quarter of 2023 around 192.000 euros.
Rising interest rates
“Still rising interest rates and low consumer confidence combined with property prices continue to weigh on demand and lead to a drop in the number of loans granted,” explains Ivo Van Bulck, general secretary of the UPC .
According to data from the National Bank of Belgium (BNB), mortgage rates continued to rise during the last quarter. They oscillated on average between 5.26% (for loans with an initial rate fixation period of up to 1 year) et 3,40% (for loans with an initial rate fixation period of more than 10 years) in August.
Construction loans are collapsing
This is the number of construction loans which experienced the largest decrease, with a drop of 53.1% in the number of grants, followed by contracts of credit for other destinations (garages, building plots, etc.) which plunged by 37.7%).
“Still rising interest rates and low consumer confidence combined with housing prices continue to weigh on demand.”
Those intended for renovation fell by 29.1% and the number of loans taken out for the purchase with conversion of a home fell by 10.5%.
The number of external refinancings (-67%) plunged in the third quarter, which is not surprising in the current climate of rising rates.
The fixed rate remains unbeatable
Despite the rise in rates, the vast majority of borrowers (97%) opted for a fixed interest rate in the third quarter of 2023, or a variable interest rate with an initial fixed rate period of at least 10 years. In barely 0.2% of cases, borrowers still opted for loans with an interest rate that varies annually.
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