Net demand for housing loans increased further in the fourth quarter of 2019, driven mainly by the low general level of Interest Rates, while favourable housing market prospects and consumer confidence also contributed positively.
According to the January 2020 euro area bank lending survey (BLS), net demand for housing loans increased further in the fourth quarter of 2019, driven mainly by the low general level of interest rates, while favourable housing market prospects and consumer confidence also contributed positively.
The use of alternative sources of finance continued to have a slightly negative effect on demand, the BLS report stated.
The European Central Bank in a press release stated that euro area banks described that regulatory or supervisory action continued to have a strengthening impact on their capital positions in the 2nd half of 2019, as well as a tightening impact on credit standards across all loan categories (with further tightening expected over the next six months).
Respondent banks also reported that non-performing loans (NPLs) had a small tightening impact on credit standards for loans to enterprises and consumer credit in the second half of 2019 (and a broadly neutral impact on credit standards for housing loans), the bank stated.
It further said that risk perceptions and risk aversion were the main drivers of the tightening impact of NPL ratios.
The euro area bank lending survey (BLS), which is conducted 4 times a year, was developed by the Eurosystem in order to improve its understanding of banks’ lending behaviour in the euro area.