House ownership is becoming less attainable for many

Young people need to borrow €90,000 on average to buy their own housing.

(Source: Sme)

Tightening of conditions for taking mortgages has made house ownership less available for many Slovaks. Banks do not provide mortgages covering 100-percent of real estate prices anymore, and thus those interested financing a house or flat via a mortgage must pay a portion of the purchase price in cash.

A survey by Tower Finance conducted on a sample of 1200 people in October showed that the most affected group is young people. They have the greatest need to secure their own housing, but they simultaneously have had the shortest amount of time to save up.

“While young people need to borrow as much as €90,000 on average, older age groups need to borrow by €20,000 less,” said Ondrej Broska, partner of Tower Finance, as cited by the TASR newswire, adding that while banks will gradually not provide loans higher than 80 percent of the real estate price, people without prepared cash will have to use other forms to cover this gap, for example with interim loans or other bank products.

The situation is also more pressing due to the situation on the real estate market. As demand keeps exceeding supply, real estate prices are at maximum levels and will not decrease in the near future.

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