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Demand on the retail credit market remains very strong. While new personal loan originations broke the previous annual record in September, a dramatic turnaround would be needed in housing loans to prevent a new record in new contracts in 2024, according to data published by the Hungarian National Bank (MNB).
The month of October saw extremely buoyant demand for home loans, with banks signing a total of HUF 118.1 billion (EUR 1 = HUF 412) worth of new contracts, up from HUF 114 billion in the previous month but nearly two and a half times the amount a year earlier, writes Világgazdaság. In personal loans, the tenth month saw a new record for the number of contracts signed, with the MNB recording a total volume of EUR 80.6 billion, which is unprecedented. Demand for baby support loans also increased slightly compared to the usual volume of around HUF 20 billion per month this year: in October, the statistics showed a contracted amount of slightly over HUF 24 billion.
Looking at the first ten months of the year,
the expansion in the retail credit market is also impressive, although this is partly due to the sharp fall in demand last year.
In housing loans, new contracts signed in the ten months amounted to HUF 1121.3 billion, almost two and a half times the HUF 464.6 billion signed a year earlier.
Photo: Pixabay
On the basis of the former, it is almost certain that this year will see a new record for housing loans, with banks having disbursed just over HUF 1,300 billion in housing loans in 2021, the peak year so far. In personal loans, the market was already at HUF 681.6 billion of new contracts at the end of October, therefore the only question is how much the record of HUF 558.7 billion set for the whole of 2019 will be surpassed. As for baby support loans, the market seems to be stabilizing at a lower level than usual between 2019 and 2022: in the first ten months of this year, banks signed new contracts worth HUF 208.9 billion, not quite 6% higher than a year earlier.
As demand remains strong, the stock of retail loans is also breaking records month by month: at the end of October, the total portfolio stood at HUF 10,944.2 billion, 8.4% higher than a year earlier.
Unsurprisingly, housing loans and personal loans contributed most to the increase, with the former growing by 11.6% to HUF 5,5552.6 billion in the year to end-October and the latter by 13.2% to HUF 1,514.7 billion. The stock of both loan products rose to new highs, as did the baby support loan, standing at around HUF 2,154 billion.
The upturn in the retail credit market is expected to continue in the period ahead, with subsidised schemes already in place and the new workers’ loan due to be launched in January playing a significant role.
Via Világgazdaság; Featured image via Pexels