New housing credit reaches record value in October, highest in ten years.
Total value of new housing credit contracts reached €1.676 billion in October, the highest amount since 2014, with almost half of the credit attributed to individuals under 35 years old.
Amount of new home loans reaches highest value in the last decade in October.
The Bank of Portugal revealed, as reported in Notícias ao Minuto, data on loans granted in October. In housing credit, the new loans amounted to 1.676 billion euros, an increase of 499 million compared to October 2023 and an additional 131 million compared to September 2024.
This value is the highest recorded in the historical series that started in December 2014. According to the Bank of Portugal, the segment of customers under 35 years old represented 48% of the amount of contracts for permanent own housing.
Fiscal benefits boost demand among young people.
Since August 2024, young people under 35 benefit from exemptions from IMT (Municipal Property Transfer Tax) and Stamp Duty when purchasing their first own and permanent home. For example, when buying a house worth 300,000 euros, this group saves around 13,377.58 euros in taxes (10,977.58 euros for IMT and 2,400 euros for Stamp Duty).
The measure that provides for a public guarantee for youth housing credit, where the State ensures a portion of the loan, is expected to come into effect at the end of 2024 or beginning of 2025. The public consultation of the Bank of Portugal on this issue recently ended.
Renegotiations and falling interest rates
In October, the volume of credit renegotiations totaled 535 million euros, an increase of 104 million from September, but a decrease of 684 million compared to October 2023.
Regarding the interest rates charged, the average rate for new housing credit decreased from 3.48% in September to 3.39% in October, reaching the lowest value since January 2023. This is the 12th consecutive decrease recorded, according to the Bank of Portugal.
In the euro area, where the average interest rate was 3.50% in October, Portugal recorded the seventh lowest average interest rate among the countries in the region.
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