Romania's mortgage market, which is isolated from the US credit crunch, is expected to boast the fastest growth rate in Central and Eastern Europe, with improved salaries to largely aid development of housing loans.
"Within the next three years, I expect the CEE mortgage market to register an annual growth rate of 30%, with Romania as the main growth driver," stated Bill Schaub, GE Money's regional mortgage leader in Central and Eastern Europe.
GE Money, the retail financial services arm of US General Electric giant, has been present in Romania since 2006, when it acquired Domenia Credit, Estima Finance and Motoractive financial services firms.
"Wage incomes, the economic climate and interest rate upward or downward trends are the main factors behind the development of Romania's mortgage market. Middle class consolidation also plays a vital role in market development," added Schaub.
Over one third of Romanians want to improve their living conditions over the next five years and are prepared to invest, on average, 20,000 euros, indicates a survey conducted by TNA AISA and commissioned by GE Money.
In comparison, 76% of Czechs and 65% of Russians think about mortgage investments, and earmark 25,000 euros and 20,000 euros, respectively.
The survey took into account the population of the Czech Republic, Poland, Romania and Russia, with data gathered from around 1,000 respondents in rural and urban areas. In all the surveyed countries, the population wants to finance house modifications or improvements with their financial resources. "(...) The penchant for this type of financing from personal resources is a challenge for creditors, which have to persuade customers with confidence and professionalism and also select products depending on the customer's profile and specific needs," explained Schaub.
In late September, the value of mortgages reached 11.6bn RON (3.4bn euros), 4 times lower than the value of consumer loans.
The domestic consumer loan boom is motivated by the priorities of the population, which generally puts the acquisition of a car first.
With regard to the effects of the US mortgage crisis, the Romanian financial market should not be concerned.
GE Money financial services department aims to become Romanians' main provider of financial services.
"In the next 5 years, GE Money will focus on the Romanian mortgage market, which will be the domestic unit's growth driver. We will consider the expansion of our company portfolio, as well as signing new partnerships.
"Stronger cooperation with credit brokers is one of the directions GE Money has followed to become the main loan provider," concluded Schaub.
GE Money
The retail financial services arm of US General Electric giant, has been present in Romania since 2006, when it acquired Domenia Credit, Estima Finance and Motoractive financial services firms.
In the next five years will focus on the Romanian mortgage market, which will be the domestic unit's growth driver
Stronger cooperation with credit brokers is one of the channels GE Money has pursued in its goal to become the main loan provider
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