BR Exclusive. Prima Casa guarantees reached 66.8 pct of the RON 1.92 billion ceiling

According to the latest data of National Credit Guarantee Fund for Small and Medium Enterprises (FNGCIMM), in the first half of 2018, were granted 16.661 guarantees for Prima Casa guvernamental program, around 66.8 percent of the value of the RON 1.92 billion ceiling.

Alexandru Petrescu, general manager of FNGCIMM, said that Prima Casa program can be considered one of the most successful governmental programs, the positive impact of which can be found in increasing the quality of life of young people – almost 70 percent of program beneficiaries are young people aged 25-35, and 12 percent have less than 25 years – as well as supporting economic development.

The peak of the program was 2015, with a total of 35,080 guarantees. In fact, according to BNR vicegovernor Liviu Voinea, Prima Casa was the undisputed leader of the residential loans, covering 91.4 percent of total mortgages between 2009, the year the program started and 2016.

It was almost a monopol, and everybody welcome it. Banks, because they were selling credits, customers, because they could buy a controlled interest credit, with an advance of only 5 percent, in a country where home property is almost a religion, with 94 percent of people owning the house they live in.

In the last one year – one year and a half, the role of Prima Casa decreased, the demand for more expensive apartments growing. More than that, a 15 percent, or 25 percent advance asked for classical mortgages is seen as more secure, reducing the risk of default. Interesting enough is the fact that Prima Casa buyers usually paid an advance above the 5 percent required. According to FNGCIMM officials, only the low income level customers choose the minimum value, the rest prefered to pay as much as possible as advance.

Prima Casa figures

In 2018 compared to 2017, the average value of the guarantees granted for the Prima Casa increased this year by about 7 percent, from RON 94,700 to RON 101,200.

About 60 percent of the guarantees were for the purchase of two-room dwellings, while tricameral buildings were preferred by 30 percent of the beneficiaries. Interestingly, the share of new real estate purchased through the program has reached about 60 percent.

This can be explained by the fact that in the top of the counties with the most first house purchases there are those with a growing offer of new housing, headed by Bucharest-Ilfov – where approximately 3,500 new residential units were sold followed by Brasov, Iasi and Cluj, with less than 1,000 units each.