Housing Loans Guarantee Program Also Depends On Bks

"For the measure to be successful, the banks’ lending policy should be more flexible. We will have to see the banks’ opinion on the matter. Even if the government grants guarantees for the loans’ reimbursement, banks (…) want to make sure they have a constant cash-flow on the period of the loan," Radu Zilisteanu, real estate consultant, told MEDIAFAX Thursday.

Zilisteanu added that the problem when buying a dwelling is not the guarantee but the income of the solicitor.

Romania Prime Minister Emil Boc Wednesday said that the loans contracted for the purchase of the first home will be guaranteed by the state, within the maximum limit of EUR60,000, with the entire financing granted to this program reaching EUR1 billion.

The guarantee will be available for people buying their first home and who have not taken any mortgage loans before.

Finance minister Gheorghe Pogea stated the measure will lead to the resuming of lending, the relaunch of the real estate market and of the constructions sector.

Some of the real estate consultants and developers believe that the program might represent an incentive for the residential market, which is currently almost blocked, although the application norms have not been announced yet.

Nevertheless, the representatives of real estate companies consider that the guaranteed sum should be different, depending on the solicitor and the location of the dwelling.

"The apartment demand continues to be very high, but most of the people have problems with the financing. It is a partial solution as it does not solve the problems of all categories of persons who need a dwelling. The guarantee should be established gradually, based on the needs of those who want to buy the apartment, and encourage those who need a home more urgently," stated Raluca Oprescu, sales manager of residential complexes Primavara in Bucharest, developed by Can Serv company.

Radu Zilisteanu also agreed with the need for a different guarantee level.

In his opinion, the program would not have a significant influence on the market even if applied, given the low number of transactions that can be guaranteed.

According to real estate consultants, this measure would mainly bring advantages to the old apartments market, where prices are around EUR60,000.

Cristian Erbasu, head of Construction Companies Employers Organization, stated that the effects of the measure on the market will be noticeable by the end of the year, but they would not be "spectacular".

"There will be little solicitors able to meet the conditions. It is a good news only for part of the youngsters," Erbasu said.

Erbasu added that constructors cannot rely on this program as they mainly depend on infrastructure investments and projects.