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The percentage of housing loans with KredEx sponsorship has undergone a considerable decrease
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08.09.2006
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As of the end of August of 2006, young families and specialists have taken with the aid of KredEx loan guarantee in total 582 million kroons of housing loan from the banks. 797 young families and specialists have obtained themselves a new home in 2006 with guarantee. It makes up only 2.85% out of all the housing loans issued in Estonia.
With the boost in real estate prices the volumes of housing loans issued in Estonia and also the average loan sums sponsored by KredEx have been growing annually. If the average loan sum of 2000 was about 215 000 kroons, it has been increasing annually about 23%, amounting in 2006 already to 733 500 kroons. At the same time the proportion of KredEx loan guarantee of all Estonian housing loans has undergone a considerable decrease. If the loans issued with KredEx loan guarantee formed 29% out of all the housing loans in 2001, in 2003 the respective percentage was already 18.5% and in 2006 the given ratio fell already down to 2.85%.
By the Head of KredEx Housing Division, Mirja Adler, the primary cause of a constant fall in KredEx loan guarantee is a close competition between the banks, resulting in a constant simplification of the loan conditions and decrease of the self-financing requirement of banks. "Of course a tremendous increase in real estate prices is also a problem for several individuals from the KredEx target group, therefore it is hard for several young people to collect even 10% of their own financial leverage, " comments Mirja Adler. Also the fact that the loan guarantee of KredEx have been channelled to a relatively narrow target group must be considered.
KredEx has been issuing housing loan guarantee for young family, young specialist and leaseholder dwelling in a restituted building since 2000. During this period 16 000 young families and specialists who have taken 6.8 billion kroons of housing loan with KredEx guarantee have obtained their home by guarantee.
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