Hypostat 2015

More documents

Recommendations

Info

EU 28 Country Reports Bulgaria By Maria Pavlova and Paolo Colonna, European Mortgage Federation – European Covered Bond Council Macroeconomic Overview 2014 was a difficult and challenging year. Nevertheless, the Bulgarian economy continued to grow, on the back of domestic demand. Unfortunately, in 2014, Bulgarian consumers had to do most of the ‘heavy-lifting’ to compensate for lacklustre demand from EU partners. Nevertheless, a looser fiscal policy and an increased absorption of EU funds overshadowed sustained political uncertainty and the failure of a large bank. Thus domestic demand improved in 2014. While Bulgaria’s net external position has improved in recent years, the stock of liabilities remains high. In 2014 the net international investment position fetched 76% of GDP at the end of the period, although a large proportion of this is due to cross-border intra-company financing. Nevertheless, the stock of liabilities could pose a risk for the financing of future investments and growth. However, a long series of current account deficits in the first decade of the 2000s has left Bulgaria a large external debt burden. Gross external debt stood at EUR 40 billion at end- 2014, accounting for a worrisome 94% of GDP, largely by the private sector. The deflationary environment and growing government finance needs are putting pressure on the stock of liabilities. A deflationary trend has prevailed since the middle of 2013. Deflation has helped push up real wages but has hampered businesses and it is likely to have a net negative effect on the economy. On the one hand, debt servicing is likely to become more expensive, on the other declining prices will slash profitability, especially if wages and productivity do not rise in lockstep. Companies have been reacting to a stagnating economy by cutting costs (pay/benefit reductions and lay-offs) and perhaps more worryingly by curbing investments. From a labour standpoint, convergence to EU income levels will remain slow, with growth gradually reaching only 2.5% and unemployment declining to 11.4%. Housing and Mortgage Markets Bulgaria’s housing market is showing signs of recovery, despite the difficult years, and property transactions are starting to pick up. In 2014, the average price of existing flats in Bulgaria increased 1.15% to BGN 874.49 (EUR 447.02) per square metre, the first year-on-year increase since 2008. In Sofia, the capital, the average price of dwellings was up by 3.1% in 2014 from a year earlier. Mortgage Funding In 2014, one mortgage bond was issued. The volume of issued mortgage-backed bonds totals EUR 273.3 million originated by 11 issuing banks (currently 10 banks after the merger of MKB Unionbank and First Investment Bank). As of the 31 st of December 2014, outstanding mortgage bonds amounted to EUR 5.0 million. Notes: Source: National Statistical Institute; Source: Bulgarian National Bank; Source: European Mortgage Federation-European Covered Bond Council. Bulgaria 2013 Bulgaria 2014 EU 28 2014 Real GDP growth (%) (1) 1.1 1.7 1.3 Unemployment Rate (LSF), annual average (%) (1) 13.0 11.4 10.2 HICP inflation (%) (1) 0.4 -1.6 0.6 Outstanding Residential Loans (mn EUR) (2) 3,507 3,499 6,909,057 Outstanding Residential Loans per capita over 18 (EUR) (2) 574 577 16,787 Outstanding Residential Loans to disposable income ratio (%) (2) n/a n/a n/a Gross residential lending, annual growth (%) (2) 6.0 9.7 n/a Typical interest rate on new residential loans, annual average (%) (2) 7.0 6.7 3.4* Owner occupation rate (%) (2) 85.7 n/a n/a Nominal house price growth (%) (1) -1.8 2.8 2.2 * Please note that this value is the simple average of the typical interest rate of the EU 28 countries. Sources: (1) Eurostat (2) European Mortgage Federation – Hypostat 2015, Statistical Tables. Property transactions in Bulgaria, particularly in Sofia, continue to pick up. Threeand four-bedroom apartments were the most popular in 2014, representing about 70% of all property sales, according to Global Property Index. Bulgaria’s mortgage market expanded during the boom years from just 0.39% of GDP in 2000, to 12.35% of GDP in 2010. Mortgage loans outstanding were 11.18% of GDP in 2014. Credit demand remains weak. The total amount of outstanding housing loans dropped 1.4% y-o-y to BGN8.69 billion (EUR 4.44 billion) in February 2015, despite record-low interest rates, according to the Bulgarian National Bank. 28 | 2015 EMF HYPOSTAT
EU 28 Country Reports Bulgaria Fact Table Entities which can issue mortgage loans: The market share of the mortgage issuances: Proportion of outstanding mortgage loans of the mortgage issuances: Typical LTV ratio on residential mortgage loans: Any distinction made between residential and non‐residential loans: Most common mortgage product(s): Typical maturity of a mortgage: Most common way to fund mortgage lending: Level of costs associated with a house purchase: The level (if any) of government subsidies for house purchases: There are no specialized mortgage banks in Bulgaria. All commercial banks have mortgage credits in their portfolios. There is no provision for only banks to provide mortgages. Seven banks had disbursed about 85% of all mortgage loans. DSK Bank: 31%; United Bulgarian Bank: 20%; Bulbank: 11% (stand 2005). Not available The average LTV ratio is 70% for properties under €100,000, 75% for properties over €100,000 and usually around 60 to 65% for brand new properties. Not available The most common mortgage product is a loan with variable rates, which are updated at the bank’s convenience. The average maturity of mortgage loans in Bulgaria is 18 years. Funding of mortgage loans is based largely on deposits. Although mortgage bonds are being issued, they are not used as a primary funding source by banks, although this is changing and mortgage bond issuances are competing more and more with funding from deposits. A variety of taxes and fees are payable when buying a property in Bulgaria, most of which vary according to the price but which may also depend on whether the property has land attached, whether an agent is involved (as opposed to buying direct from the vendor), whether you have employed a lawyer and surveyor and whether you employ a translator. Municipal Tax: 2% Purchase price; Property tax: 0.15% Purchase price. Notary: depending on purchase price up to 3000 lev; Selling Agent fee: up to 10% purchase price; VAT: if for residential and residential property purposes it is exempted, if not, it is 20% (VAT registered entities are entitled to a refund). In 2013 little less than 1.5% of GDP went into government support of housing and community amenities and housing development. 2015 EMF HYPOSTAT | 29
Page 1 and 2: EMF Hypostat 2015 September 2015 HY
Page 3 and 4: Contents Foreword..................
Page 5: Foreword Finally, in the spirit of
Page 8 and 9: Housing and Mortgage Markets in 201
Page 17 and 18: Mortgage Lending in Foreign Currenc
Page 24 and 25: EU 28 Country Reports Austria By Wo
Page 26 and 27: EU 28 Country Reports Belgium By Fr
Page 30 and 31: EU 28 Country Reports Croatia By Al
Page 32 and 33: EU 28 Country Reports Cyprus By Ioa
Page 34 and 35: EU 28 Country Reports Czech Republi
Page 36 and 37: EU 28 Country Reports Mortgage Fund
Page 38 and 39: EU 28 Country Reports Estonia 2013
Page 40 and 41: EU 28 Country Reports Finland Fact
Page 42 and 43: EU 28 Country Reports Mortgage Fund
Page 44 and 45: EU 28 Country Reports Germany By Th
Page 46 and 47: EU 28 Country Reports Greece By Cal
Page 48 and 49: EU 28 Country Reports Greece Fact T
Page 50 and 51: EU 28 Country Reports years will be
Page 52 and 53: EU 28 Country Reports Ireland By An
Page 54 and 55: EU 28 Country Reports Ireland 2013
Page 56 and 57: EU 28 Country Reports At the end of
Page 58 and 59: EU 28 Country Reports Latvia Fact T
Page 60 and 61: EU 28 Country Reports Lithuania Fac
Page 62 and 63: EU 28 Country Reports Luxembourg Fa
Page 64 and 65: EU 28 Country Reports Malta Fact Ta
Page 66 and 67: EU 28 Country Reports Netherlands F
Page 68 and 69: EU 28 Country Reports Poland 2013 P
Page 70 and 71: EU 28 Country Reports Portugal Fact
Page 72 and 73: EU 28 Country Reports Romania 2013
Page 74 and 75: EU 28 Country Reports Slovakia By P
Page 76 and 77: EU 28 Country Reports Slovenia By A
Page 78 and 79:
EU 28 Country Reports Spain By Iren
Page 80 and 81:
EU 28 Country Reports Sweden By Chr
Page 82 and 83:
EU 28 Country Reports United Kingdo
Page 85 and 86:
Statistical Tables A. The Mortgage
Page 87 and 88:
Statistical Tables - The Mortgage M
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Statistical Tables - The Housing Ma
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Statistical Tables - Funding of the
Page 105 and 106:
Statistical Tables - Funding of the
Page 107 and 108:
Statistical Tables - Macroeconomic
Page 109 and 110:
Statistical Tables - Macroeconomic
Page 112 and 113:
Annex: Explanatory Note on Data A.
Page 114:
Annex: Explanatory Note on Data Cro
show all

Hypostat 2015

Create successful ePaper yourself

Delete template?

Save as template?