Financial trends in 2020
03/11/2020
Recent data from the hungarian Ttrade Statistics Office show that one-sixth fewer people took out housing loans in the first half of this year than a year earlier. In summary, however, there was no substantial decline; 422 billion hungarian forints were disbursed in housing loans in the first half of the year, which is only 1% less than a year earlier, which means that the average loan amount per transaction increased. In this area, loans taken out for expansion and modernization behaved in the opposite way: they fell by a third of their total amount. Loans for construction increased by 5%, while loans for the purchase of second-hand flats fell by the same amount, while the population took out 15% more loans for financing new housing. In total, this means an average loan of HUF 13.3 million for the purchase of new flats for residential consumers in the first half of the year, while the same was HUF 10.5 million for used flats.
As is well known, until the 31th December 2020, the repayment moratorium was general, applied by credit institutions to contracts already existing on 18 March 2020, among both retail customers and businesses.
The Act 107 of 2020 was adopted on the extension of the repayment moratorium. The law introduced the following innovations:
• the unemployed, individuals expecting and raising children, pensioners and public workers can benefit from the moratorium on repayment with the same conditions until 30 June 2021 as before;
• regarding the companies; only businesses in financial difficulties can take advantage of the option from the 1st of January, these firms - unlike retail customers, with whom their bank agrees electronically on eligibility - must send a separate application form to the credit institution;
• those who fail to extend the repayment moratorium shall fulfill a loan cancellation ban until the middle of next year.
Regarding the procedure of credit institutions, the experience of our Law Firm is that due to the epidemic situation, the personal customer turnover has significantly decreased and the demand for digital banking and electronic communication has increased. Taking this in mind, banks are trying to catch up with their infrastructure to the changed circumstances. Generally speaking the crediting procedure has not become significantly more cumbersome, as many previous acts can be resolved electronically with the participation of a legal representative. It can also be stated that the willingness of banks to provide loans has not decreased and may strengthen further at the end of the year.