The new indebting rules tightened by the National Bank of Slovakia (NBS) will primarily impact citizens of the Slovak capital, Bratislava. They will be able to buy on credit, from an average wage, maximally a one-room flat in a new building or a two-room flat in an older block of flats. Other regions will be significantly less affected by the new lending cap, Poštová Banka has found out.
Based on the new lending cap effective as of July 1, the total indebtedness of an individual must not exceed eight-fold his or her annual net income. The share of loans provided above this level will gradually decrease and as of April 2019 cannot exceed 5 percent.
While the new rules will apply to new loans, the old loans of the applicant will be taken into consideration.
People especially interested in purchasing more expensive real estate will be impacted by the tightening of the rules. Their net income may not guarantee a loan big enough to enable them to buy such housing.
For example, in the Bratislava Region the average monthly wage is €1,200, which means a net wage of €902 for a single person. Thus he or she will be able to borrow €86,592 at the most. In other regions it will be even less.
The bank warns that when buying new housing the buyer will need cash equalling 20 percent of its price as well as the central bank limiting the number of mortgages provided above 80 percent of the real estate price. Thus, an average Bratislavan will be able to buy housing up to €108,240. When the average prices of real estates are taken into consideration, this will be enough just for the purchase of an apartment 56.82 square metres in size. In the case of new residential buildings, this will be enough for just one-room apartment since their price climbs to €3,000 per square metre.
In other regions of Slovakia the situation will be more favourable. The reason are the lower prices. But in these other regions the more expensive apartments in new residential buildings will be less affordable for many, according to Poštová Banka.