The size of the average housing loan has increased this year

Taavi Raudsaar
Economist at Eesti Pank

Banking statistics published today indicate that the portfolio of loans issued to companies and households continued to grow rapidly in July, as did deposits, though other economic indicators point more towards slower growth in the economy. There has been slightly slower growth in new loans issued this year, but July was something of an exception to this.

The stock of housing loans was around 7.8 billion euros in July, which was 7% more than a year earlier. Growth has been at this rate for almost two years now. Although there have been 2% fewer new housing loan contracts signed this year than a year earlier, the size of the average loan has increased. Fewer housing loan contracts but larger amounts borrowed reflect the general development in the real estate market, with a slight fall in the number of transactions but rising prices. There has also been a small rise in recent quarters in the share of borrowed money in the value of real estate purchased.

The growth of around 10% in other loans to households has been driven by car leases. The growth in car leases and other loans has been given momentum in recent months by one additional bank and one additional leasing company becoming subject to reporting requirements. Without them, the growth would have been around 6%. Demand from households for loans is being maintained by the rapid rise in incomes and increasing confidence.

The stock of bank loans and leases to companies was above 9.5 billion euros in July, or a little over 6% more than a year earlier. This rate of growth is a little higher than the average of the preceding months. A year ago the growth in borrowing was due to large loan transactions in the energy sector, but in recent months it has been companies in agriculture and real estate that have increased their loan liabilities the most. Industrial companies, where confidence has fallen notably in recent months, have reduced their stock of loans and leases by around 5% however.

The deposits of households and companies continue to grow fast, and the volume of deposits of both types was up by around a tenth on a year previously. Household deposits total around 8 billion euros, and those of companies around 7 billion. It must be remembered though with the rapid growth in deposits that deposits are spread extremely unevenly across households, and the financial savings of many families remain very small.

 

Financial sector statistics and the publication calendar

Additional information:
Hanna Jürgenson
Eesti Pank
Tel: 668 0959, 5692 0930
Email: hanna.jyrgenson [at] eestipank.ee
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