Support of Housing in the Czech Republic

Buildings savings »  Support of Housing in the Czech Republic

As in the preceding years, the year 2004 surpassed previous records in the number and volume of granted loans for housing finance from the buildings savings banks.

In 2004, 163,834 new buildings savings loans were granted; bridging loans had a total volume of CZK 40 billion. The volume of financial means granted in the form of loans for financing housing needs grew in a year-to-year comparison by more than 20 %.

Note: the buildings savings loans used for previously granted bridging loans are not incorporated into the total volume of buildings savings loans.

These figures, as well as the following diagram, illustrate the fact that financing with bridging loans prevails; nevertheless, bridging loans are often paid off within a short period of time by a granted buildings savings loan. Due to this, the ratio of buildings savings loans in the total volume of granted loans is considerably increasing. This positive trend is expected to continue in the years to come.

As of December 31, 2004, more than 786,000 loans at a volume of CZK 84.2 billion have been administered.

The survey of employing financial means from loans granted by buildings savings banks documents the fact that in addition to financing the acquisition of apartments and family houses, nearly one third of these funds (32%) is employed in reconstructions and modernizations of housing units. According to statistical surveys, the housing in the Czech Republic is dilapidated, and requires immense investments. This evaluation refers primarily to concrete panel apartment houses, many of which have reached the climax of their viability. Buildings savings thus represents an ideal means for coping with this problem.

In 2003, buildings savings banks granted 163,834 loans, at a volume of almost CZK 40 billion. Out of this volume, 20% were employed for the acquisition or construction of apartments and family houses. Buildings savings banks contributed to financing more than 22,000 projects. In light of the number of new housing units commenced in 2004 (39,000), this indicates that that buildings savings took part in 50% of the financing of new housing units in the Czech Republic.

It is necessary to point out that loans for construction of new housing units represent only a part of total volume of financing of housing needs granted by buildings savings banks. More than one third (35%) of these financial means were employed by clients for the acquisition of an existing apartment or family house.

Due to the considerable increase in credit business in recent years, buildings savings are very well established on the housing finance market. Of the total 200,000 housing finance loans granted in Czech Republic in 2004, buildings savings banks granted almost 163,000 buildings savings loans and bridging loans. In the same year, 41,000 mortgages were granted. The volume of financial means granted in the form of mortgages was CZK 52 billion; the amount of financial means granted by buildings savings banks was CZK 40 billion. The utilization of a buildings savings loan thus enabled many more people in all income groups to finance their housing needs.

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