At the same time, the total issued amount grew by less than 5%. The largest increase in the number of concluded contracts was for housing loans, credit card loans and student loans.
In the first six months of 2024 credit institutions concluded nearly 80,000 credit agreements, which is the highest number in the last 5 years during the equivalent time period. Comparatively, in the first half of 2023, residents concluded fewer than 63 thousand contracts, and a year earlier, fewer than 60 thousand contracts.
The number of borrowers also increased by a quarter (25%), while in the first half of last year it reached less than 60 thousand, this year the number of customers has increased to over 74 thousand.
"From the beginning of 2022 until the middle of last year, there was a rapid increase in the Euribor rate, which made loans significantly more expensive. Gradually, the Euribor rate is decreasing, and this results in a rapid increase in loans issued. Most likely, a large number of clients held a waiting position, and when positive trends appeared in the market, they decided to receive a loan," said Intars Miķelsons, executive director of KIB.
In the first half of this year, the number of concluded contracts for housing loans increased by 28%, by 26% for credit card loans, and by 24% for student loans, compared to the year before. At the same time, the number of consumer credit contracts increased by only 4.4%, and the number of operational leasing contracts by 1.8%.
More loans, but smaller amounts
Despite the rapid increase in the number of credit agreements, the total amount issued in loans grew by only 4.5%, suggesting lenders remain cautious. For example, the average amount of housing loans even decreased by around 800 euros during the year, for financial leasing by approximately 500 euros, and for operational leasing by 1,000 euros.
While the number of credit agreements concluded in the first half of this year is the highest in the last five years, the total amount has not yet reached the level of 2021 and 2022.
Kaspars Lukačovs, Luminor bank's personal lending manager in the Baltic states, explained that although Euribor rates have fallen and the number of loans issued is growing, the high rates still limit those potential borrowers who would like to borrow a larger amount for the purchase of a home:
"In the new housing segment, prices are higher with a tendency to grow, as a result, borrowers more often choose to buy housing in the secondary market, at a lower price per square meter. Currently, the average mortgage loan amount in our bank is 90,000 euros. With such a loan, a home is most often purchased in the amount of a little over 100,000 euros, which corresponds to a small apartment in a new project or a larger home in a serial building."
The biggest increase in the total issued amount was for credit card loans – by 20% – and consumer loans – by 10%.
