MENA Newswire News Desk: Mortgage lending in the eurozone surged in July as interest rates began to fall, marking a recovery in the housing market, according to data from the European Central Bank (ECB). The region’s banks issued €71 billion (US$78.5 billion) in home loans, the highest level since August 2022, signaling a turnaround in consumer borrowing for home purchases. The boost in mortgage lending is welcome news for European banks, many of which derive significant revenue from home loan businesses. Deutsche Bank AG and ING Groep NV both reported an uptick in lending activity as central banks, including the ECB, began loosening monetary policy. The ECB is expected to cut rates again later this year, providing further momentum for the housing sector.
James von Moltke, Deutsche Bank AG’s Chief Financial Officer, noted during the bank’s second-quarter earnings call in July that the German mortgage market had found a “floor” and could now experience growth. ING Groep NV’s CFO Tanate Phutrakul echoed this optimism, stating that the bank had expanded its mortgage lending across all of its retail markets. The revival of the mortgage sector has also had a positive impact on property values. In Germany, home prices increased for the first time in two years during the second quarter, reversing a long-standing decline in the real estate market.
As central banks gradually reduce interest rates, further growth in mortgage lending is anticipated. European lenders stand to benefit significantly from this trend as the housing market continues its recovery across the region. Economists suggest that the rebound in home purchases could help stabilize broader economic indicators, with potential spillover effects benefiting construction and related industries. However, some caution that inflationary pressures could temper further rate cuts. The ECB’s next decision on interest rates, expected later this year, is widely seen as a key driver for sustained growth in the European housing market.