The decline of real estate prices, even to half the recordvalues of 2007 and 2008, have left many who bought homes with loansin a position to pay huge instalments, which no longer haveanything to do with the current context.
In Budapest, a group of MPs of the ruling party last week cameup with a draft law aimed at awarding more protection to debtors,with one of the measures being to adjust the amount left to repaybased on the current market value of the financed property.
Whilst in the spring of 2008 a three-room apartment sold inBucharest for 160,000 euros, now it can be acquired for around80,000 euros, according to ZF's real estate index.
Considering that people's incomes have in many cases been cut, butthe bank instalments have not, the amount left for everydayspending - i.e. for consumption - is even lower, and this affectsrecovery even at macroeconomic level.
If the measure proposed by Hungarian MPs were applied, instead ofpaying the instalment on a 120,000-euro loan (corresponding to a25% down payment on the acquisition of a 170,000-euro apartment),of 850 euros per month, clients would now pay just 560 euros permonth, corresponding to an 80,000-euro value. This would mean290-euro savings, equivalent to 34% of the monthlyinstalment.
On the Romanian market there are currently no concrete talks onsuch measures.
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