Greek banks are forecasting a moderate increase of around 20% in new mortgage lending for 2024, according to Capital.gr, who cite strong momentum through the first nine months of the year.
Total new mortgage disbursements are expected to surpass €2.2 billion, boosted by the government’s “Spiti Mou 2” (My Home 2) program, which is projected to account for roughly one-third of total new home loans.
In 2023, new mortgage disbursements totaled €1.8 billion, marking a 38% annual increase. However, after accounting for loan repayments, write-offs, and the ongoing cleanup of non-performing loans, the net credit expansion in mortgage portfolios was about 30% lower.
This structural factor remains evident in 2024: although gross disbursements are rising, the net loan growth in the banks’ books remains constrained by debt repayments and NPL write-offs.
“Spiti Mou 2” supports demand but private lending dominates
The €2 billion “Spiti Mou 2” program, financed through the Recovery and Resilience Facility, offers subsidized mortgage rates for young couples and families buying their first home.
Since summer 2024, approved applications have exceeded €1.1 billion, signaling strong demand among first-time buyers.
Yet, the bulk of new mortgage lending still comes from standard bank products offered outside the program. These loans, not limited by eligibility criteria, often finance up to 90% of the property value and mimic the low interest rates of subsidized loans. They have attracted borrowers who did not qualify for “Spiti Mou 2” or could not find eligible properties.
Affordability remains a challenge
So far this year, total mortgage disbursements have exceeded €1 billion, and banks expect to double that figure by year-end, assuming the traditional year-end lending surge holds. The final quarter has historically been the strongest period for home loan activity.
However, affordability remains a challenge. The average mortgage amount has increased to 120,000 euros, still below the financing needs for purchasing older or higher-value properties.
