Falling property prices improve housing affordability, but long waits can make the conditions for getting a loan tougher.
As of July 1, the living wage is increasing. Banks will reduce net income by this amount as part of testing the ability to repay the loan. With a stable income, the borrower will only be entitled to a lower loan. This was pointed out by Swiss Life Select.
It depends on the income
How many euros the maximum available credit will decrease depends on income. However, the higher the income, the lower the rate of decrease in the maximum loan amount. Swiss Life Select investment analyst Pavel Škriniar pointed out that if people with a low income expect to be able to purchase one of them with the drop in real estate prices, they may be disappointed. They may not be entitled to it in the future.
“For low-income mortgage applicants, the solution to the issue of housing will only get further away as interest rates rise and the living wage increases. The sellers will not have it easy either. Those waiting for a reversal in the trend will need to wait significantly longer to sell their property at the asking price. Prices will definitely reach their maximums at some point, it’s only a matter of (perhaps a long) time before that happens.” Škriniar explained.
And there is inflation…
Owning a habitable property also brings the need for regular and irregular expenses. Waiting may not pay off for owners. They will get the asking price, but after deducting the expenses, it may be comparable to the reduced price at present.
“On top of that, there’s inflation, which will mark the amount collected in the future,” concluded Škriniar, Swiss Life Select investment analyst.
In case of confusion, it is necessary to contact an experienced financial intermediary who will evaluate the current situation and can propose a solution.
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Source: Dnes24.sk by www.dnes24.sk.
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