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BY APOSTOLOS CHARALAMBOUS
The psychology of the public as regards buying property has grown more positive during the last few weeks. Today, people are beginning to seek out property, specifically in the cities and mainly for the purpose of ownership-occupancy. This is a favourable sign that is expected to slowly create new mobility in the property sector.
Unfortunately, now that interest has started among by buyers, we have the negative attitude of the banks that continue to turn down applications for loans, claiming that they face cash flow problems. There are even reported cases exist where bank executives discourage customers that are interested in applying for loans, using a variety of excuses, such as “but what are you planning on doing, wait for a few more months before you buy” and other similar comments.
Even in cases where some of the banks began advertising their housing loans, we have realised that they do not easily offer the product that they advertise. Proof of this is the fact that developers continue to complain that although they do make agreements with buyers, these do not progress because the banks do not approve the housing loans for their customers. All this makes us quite suspicious about the real intentions of banks that are probably trying to pull the wool over the eyes of people and the government.
The claim that they face liquidity problems constitutes an easy excuse, because they cannot on the one hand face cash flow problems and not be in a position to grant loans, and on the other launch relevant advertising campaigns and announce profits of millions of Euros. However, there is something else. Before a bank grants any loan, it examines the economic position of the potential borrower and studies whether the client can repay the amount. Also, it assesses securities in the form of mortgages and other collateral of the new customer. Why, then, do banks group all clients in the same category? Why do they exclude buyers that have a strong financial position and can meet their loan instalments?
The government announced measures to aid the liquidity of the banks and despite the announcements, unfortunately the money did not reach its intended destination, which was the consumer and the market. It appears to have been misplaced along the way…
We do not know what the banks are after with the policies they are applying or where they want things to lead. If their objective is to stir up people to react dynamically, we can reassure them that this will be happening sooner than later.
With the particular policy of the banks, those that are affected are not only the developers and other professionals of the property sector, but whole economy in general. Consequently, in the interim period, it is the banks themselves that will be affected negatively.
Ultimately, the attitude of the banks contributes to the continuation of the stagnation of the market, a fact that it is not in the interest of anyone and primarily not of the economy as a whole. Why don’t the banks allow things to develop smoothly and also help buyers and the market? Why don’t they revise their policy before it’s too late? In the event of the opposite, the first who will have serious problems are the banks themselves. Enough of the run around by the banks…
Apostolos Charalambous is Chairman of Apostolos Charalambous Holdings Ltd.
