The proportion of substandard, doubtful and loss home loans in the portfolios of Hungarian lending institutions doubled in the twelve months to the end of June, though still accounting for just 2pc of all lending stock, while the proportion of special mention loans was halved, a review of the sector by the Central Statistics Office (KSH) shows.
About 94pc of stock of home loans at credit institutions in Hungary was problem-free at the end of June. Special mention loans accounted for 4pc of the portfolio and substandard, doubtful and loss loans for a combined 2pc.
Stock of home loans at banks, mortgage institutions, savings cooperatives and other financial institutions in Hungary reached HUF 3,894bn at the end of June, or about 15pc of GDP. Banks accounted for about 63pc of the total stock, mortgage institutions for 33pc and other lenders for about 4pc.
About 62pc of the stock was denominated in foreign currency, a proportion which has risen steadily since 2002. The rapid increase of foreign currency-based lending came to a halt in 2008, growing just 2pc after many banks stopped offering popular Swiss franc-based constructions because of the risk to borrowers.
In the first half of 2009, lenders signed contracts for more than 30,000 home loans worth a combined HUF 180bn, plunging 58pc and 60pc, respectively, from the same period a year earlier as liquidity dried up because of the global crisis.
About 27pc of new home loans signed during the period were subsidised by the state, up from 8pc in H1 2008. The proportion grew as banks cut back on foreign currency-based lending, which the state does not subsidise.
Foreign currency-based lending contracts accounted for 56pc of the number of contracts and for 66pc of the value of contracts signed in H1 2009, down from 80pc and 90pc, respectively, in the same period a year earlier.
The average home loan signed during the period was for HUF 6m, 5pc less than in H1 2008. The proportion of new home loans for new homes rose to 39pc in H1 2009 from 24pc in H1 2008.
The average run of home loans for new homes was 18 years. The term for loans for resale homes was 15 years.