Banking competition rekindled by “First home” programme

Three months from the granting of the first credit as part of
the “First home” programme, the biggest achievement of the
government programme is that it was able to rekindle competition
between banks. However, 90% of the homes purchased are old ones, so
the programme’s aim of getting the construction market going again
has not been achieved. “Everybody prefers new apartments, but there
are not many homes that fall below the 60,000-euro maximum
threshold. More old apartments are ultimately bought because their
prices can be negotiated,” said Gabriel Tudor, manager of real
estate agency Activ Imob in Bucharest. “A number of pre-contracts
have, indeed, been signed for apartments acquired under the ‘First
home’ programme, and part of the applications have already been
approved,” Tudor said. He says the approval process has been
accelerated after the September discussion between the Prime
Minister and the National Guarantee Fund for Loans to SMEs.
Guarantees worth 170 million euros have been issued so far for
loans granted as part of the “First home” programme, out of a total
of 1 billion euros, according to a statement made last week by
president Traian Basescu.