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And when interest rates rise?

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E quando os juros subirem?

















Total home loans increased by 4.8% in April to 98.3 billion euros compared to the same period in 2021. This is a similar increase recorded in March, the Bank of Portugal (BdP) said. After all, financial institutions gave 3.3 million euros a day only for real estate acquisition transactions, not yet reflecting the restrictions imposed by the regulator.

The Bank of Portugal introduced new restrictions on the maximum repayment period for new mortgage loans from April, depending on age.

For customers older than 35 years, the loan repayment period should not exceed 35 years. For bank customers older than 30 years and younger than 35 years, the maximum loan term should be 37 years. Loans up to 40 years old are now possible for those less than or equal to 30 years old.

However, analysts contacted by Sunrise admit that this impact is not yet noticeable. “Housing lending remains strong, but recent restrictions are not expected to have a major impact on this trend. On the other hand, these new measures may encourage young people to use home loans earlier,” says XTB’s Enrique Tome.

Nuno Garcia, CEO of GesConsult, admits that since the announcement of the restrictions we have seen a “credit rush”, which is why the maximum loan amounts were reached in March since 2007. Going forward, he believes, “these restrictions may have an impact on home buying as the time frame gets progressively shorter,” adding that “this is a situation that deserves attention, especially as we see conditions for buying a home coming later and later.” “.

an alarm sounds
The alarm is sounded not only by those who have already purchased housing, but also by those who had a mortgage loan. The explanation is simple: in recent months, the European Central Bank has shrugged off interest rate hikes, moving away from the current negative-interest-rate scenario that harms savings but benefits bank house payers.

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And Christine Lagarde already admitted this week that a simple “gradual” approach to the pace of interest rate hikes may not be enough to reduce inflation risks.

The central bank’s idea is to stop buying debt in the third quarter, allowing interest rates to rise for the first time in July, and current ECB expectations are that there will be no more interest rates in the euro area by the end of the third quarter. – reference to the interest rate on deposits, which is at the level of -0.5%.

Enrique Tomé says that in Portugal the real estate market problem is mainly due to the fact that with such a large demand for real estate, there are few offers. But he acknowledges that “in the short term, higher interest rates could effectively dampen demand in the real estate market, which could lead to a slight price correction,” adding that “concerns about a possible economic downturn could also fuel this scenario of real estate price correction.”

However, the XTB analyst is optimistic and recalls that interest rates have been at their lowest for several years, believing that, despite the start of growth, this increase will be gradual and should not greatly affect families. “In fact, compared to what is happening in the US, the ECB takes a much more cautious position, but in fact there is such a possibility. We are seeing a slowdown in growth in several sectors, with the exception of the real estate sector, which remains stable.”

But he points to risks, saying that factors that could contribute to a slowdown in the sector are beginning to emerge, such as rising interest rates and medium- and long-term risks that point to a possible slowdown in economic growth.

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More pessimistic is Nuno Garcia, for whom the increase in interest rates entails an increase in monthly housing costs, including monthly loan payments. “For families, this can be difficult to overcome because paying electricity, water and gas bills has often already been a problem, with an increase in the monthly loan payment, the situation worsens.”

And given this scenario, the official advises buyers to analyze the situation well and see if they can guarantee the payment of their expenses, “so that we do not repeat what happened in 2011, when loans were stopped due to payment.”

Despite these risks, the general director of GesConsult believes that now they will be less than those that were observed during the Troika. And he explains why: “Today we see more rules in home loan approval and people are more informed about the whole process. I don’t think we’re going to go through the same situation. However, you must be especially careful, no doubt. We emerge from one crisis and enter another almost instantly. It takes the ability to adapt and reflect so we don’t go through the same thing again.”

point solutions
If, on the one hand, Nuno Garcia says that the rental market can be seen as an opportunity and as a faster solution for the market, Enrique Tomé advises those who are preparing to buy a house in the coming months to negotiate good prices in order not to pay an excessive amount for an excessive overpriced and speculative real estate.

In an interview with i newspaper, Natalia Nunez, who is in charge of the Deco Financial Protection Authority, has already acknowledged that the decision to raise interest rates will inevitably affect those with mortgages and that it could get new contours for consumers who are at the limit of payments on mortgage loans. your expenses.

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In this regard, we must now count on rising prices for fuel, energy, food, transport, etc., as well as on rising inflation. “This is a concern that we have had since the beginning of the year. We have warned consumers to consider the household budget in case they are faced with a change in interest rates, as this may have some impact on the amount of the payment due to the bank at the end of the month.”

An even bigger headache for those who, according to the person in charge, already have a high rate of effort. “It’s not just a question of raising the interest rate, it’s all that we already feel every day, it’s the rise in prices, what’s been happening since the beginning of the year. Most families reach the end of the month and end up spending much more than before, and their income has not kept pace with the increase in these expenses,” says Natalia Nunez.



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Economy

Starting from this environment, there are 11 more mandatory pieces of equipment in the car.

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Starting from this environment, there are 11 more mandatory pieces of equipment in the car.

On July 6, 2022, a rule will come into effect requiring all new vehicles sold in the European Union to include new safety systems in the list of standard equipment 11.

The rule applies to all new models released for sale, and for models already on sale, a two-year adaptation period is provided.

What systems will become mandatory?

The European Union wants to reduce the number of fatal accidents in Europe, so it will oblige all car manufacturers to install a wide variety of safety equipment. Some of them are already included in the list of series of many models.

Here is the full complete list:

-Autonomous emergency braking
– Fatigue and distraction detection system
– Pre-installation of the ignition blocker breathalyzer
– Warning triangle
-Recording data in case of an accident
-Updated frontal crash test across the entire width of the car; improved seat belts
-Increased head impact area for pedestrians and cyclists; safety glass
– Smart speed assistant
– Track maintenance assistant
– Passenger Protection: Pole Collision
– Rear camera or detection system

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Economy

Bargain hunters bring profit to Europe. Oil continues to fall – markets in a minute

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Bargain hunters bring profit to Europe.  Oil continues to fall - markets in a minute

Gold recovers very weakly. Euro awaits fire test

Gold remains near six-month lows under pressure from a rally in the dollar, which currently acts as a safe haven, at a time when investors fear a recession and see the US Federal Reserve (Fed) tighten monetary policy.

The yellow metal rose 0.21% to $1,768.51 an ounce, but remained very close to its December 15 low of $1,764.07 last year. In turn, the Bloomberg Dollar Index, which compares the strength of the green note against 10 competing currencies, is at its March 2020 highs, trading at the waterline (0.03%) to 106.48.

“Gold seems to be in second place against the dollar,” Gavin Wendt said in an interview with Bloomberg. A senior analyst at MineLife explains that “gold has performed well this year, but the recent gains in the dollar have had a negative impact on gold, which is priced in dollars.”

This Wednesday, investors will be keeping a close eye on the release of the minutes of the latest Fed meeting as the market looks for clues that the central bank may raise its key interest rate from 50 basis points to 75 basis points next month. The meeting is scheduled for July 26 and 27.

In the Eurozone, the single currency is at the waterline against the dollar (0.07%) at $1.026, but remains at a 20-year low against the green note. The euro-dollar pair will be put to the test this week as analysts believe it’s only a matter of time before the euro equals the dollar, with some even acknowledging that the single currency could be worth less than the dollar.

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“It’s only a matter of time before the euro reaches parity with the dollar,” Neil Jones, head of foreign exchange at Mizuho, ​​said in defense, quoted by Bloomberg. Mario Martins, analyst at ActivTrades, goes further and even admits in statements to Negosios that “it is absolutely possible for the euro to be worth less than the dollar. It’s not an absolute case because it hasn’t happened yet, but it’s almost inevitable at the moment. Very possibly this week.”

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Fines? From now on it will be easier to keep the speed limit

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Fines?  From now on it will be easier to keep the speed limit

HAlmost 600,000 speed violations were reported in Portugal last year. A high number, which, however, is found not only in our country. That is why the European Union wanted to take action and apply in directive 2019/2144 – effective this Wednesday – a commitment for all new vehicles that are sold to be equipped with Intelligent Speed ​​Assistance (ISA).

It should be noted that this European Union standard will apply to vehicles of categories M (at least four wheels and carrying passengers) and N (at least four wheels and carrying goods and goods).

The function of this ISA system is to warn the driver of the speed limit in the lane in which he is driving. This will allow the driver to be more aware of the speed at which he is allowed to drive, although this system is for information only. ISA has no intervention features.

“The ISA system can rely on various input methods such as camera surveillance, map data, and machine learning. However, the actual presence of explicit numerical speed limit signs should always take precedence over any other information on board.

Recall that the European body aims to reduce the number of collisions by about 30% and deaths due to road traffic accidents by 20%.

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