Postbank
The mortgage loan market in Bulgaria continued to grow in the first quarter of this year, with the main goal of the borrowers being the purchase of a primary residence. Postbank's analysis of the mortgage market development over the last three years and the first quarter of 2022 confirms the upward trend in the sector. The institution's data reports that in 2021 the average amount of loans requested increased by 12 per cent and continues its growth in the current year. Contributing factors include the increase in personal income, attractive housing financing terms and low-interest rates, along with increased demand from consumers looking to make a long-term, secure and sustainable investment over time.
The experts' analysis shows that consumers are consistently shifting their preferences toward higher-quality housing. There is an increased interest in properties with excellent features, in areas with better infrastructure and close to green areas. Monolithic properties are increasingly in demand, accounting for 90 per cent of the share of homes financed in 2021, with less interest in panel apartments and properties under construction. As a result of the changes that have occurred in lifestyles during the pandemic, customers are looking for larger and more spacious properties. There is growing interest in three- and four-room homes, as opposed to smaller homes, which are in decline. Confirming this trend, the data shows that around 31 per cent of properties financed in the first quarter of the year were three-room apartments, compared to 27 per cent in 2021. In line with the increased demand for quality and spacious properties, the institution also reports an increase in the average cost per square meter of mortgage loan collateral, which in 2021 was 12 per cent at the country level, with the capital in the lead.
Postbank's analysis also shows that the profile of the main buyer includes people with high and stable incomes, mainly employed in trade, public administration and the IT sector. There has also been an increase in the amount of the down payment for the purchase of a property, with an average of 35 per cent under this indicator in the first quarter of the year. The average term of mortgage loan applied for remains stable at 24 years, according to the experts.
Observations also show that customers are becoming more informed and are carefully studying the steps to acquire a home, and when they choose a bank, they prefer it to be a large financial institution with proven experience and stability. According to statistics, demand for housing is mainly concentrated in the five largest cities in the country, which account for approximately 80 per cent of mortgage loan applications at Postbank. These are Sofia, Plovdiv, Varna, Burgas and Russe, with the capital undoubtedly dominating this ranking with 60 per cent of the concluded transactions.
"Postbank has a rich portfolio of solutions, products and services, thanks to which we can meet the expectations and individual needs of our customers. We continuously analyse not only the figures, but also consumer behaviour, which allows us to summarise that quality advice, high expertise and speed of the financing process are decisive for them. Through our dedicated Mortgage Loan Centres, we provide professional support for everything from the consultation, through the preparation of an offer, to the drawdown of the loan for the purchase of an own home, easily and conveniently, and most importantly - with a personal banker and a personalised approach. In response to both new customer habits and expectations for a full remote process, our innovative Online Mortgage Loan Centre service combines our years of home lending experience with the latest technology to offer them speed and efficiency. The application process and obtaining a pre-approval opinion is done entirely in a digital environment and this is part of the excellent experience we strive to provide to our customers," Postbank said.
Data from recent months shows that customers looking for finance for their new home are also increasingly interested in the added value and flexibility offered by the loan product. Postbank has a wide range of financial solutions that enable consumers to manage their repayment plans or use their savings to reduce the interest on their mortgage loans, such as the innovative Savings Mortgage Loan product. The figures highlight another definite trend in consumer behaviour, who are looking for additional security and peace of mind through the insurance products offered by the bank, with approximately 80 per cent of customers using Life Insurance.
More information about the entire range of financial solutions of Postbank can be found online at www.postbank.bg, as well as in any of the institution's centers in the country.