Macroprudential Commentary – December 2024

Mortgage market experiencing tentative recovery

The average mortgage size in Slovakia has risen since the beginning of 2024, as has the number of mortgage originations. Interest rates are gradually starting to fall. Consumer credit continues to grow steadily. Non-performing loan ratios remain low.

Corporate lending showing year-on-year contraction with signs of stabilisation

Total loans to non-financial corporations (NFCs) are declining year-on-year, but there is heterogeneity across segments. Lending to micro and large firms recorded annual growth in October 2024, while lending to the commercial real estate (CRE) sector declined. Corporate lending rates have decreased slightly.

Housing market gaining momentum

Asking prices for flats and houses have been gradually rising since spring 2024. This increase is evident across Slovak regions and property sizes. The number of listings has remained stable for a year. In the market for new-build flats, prices have not moved substantially, but the number of flats sold has increased. Against a backdrop of rising property prices, housing affordability is improving only slowly.

No change in the CCyB rate

The financial cycle is turning upwards but remains subdued. At the same time, signs of recovery are emerging in several areas. From a financial stability perspective, it is important that the credit quality of loan portfolios did not deteriorate during the financial cycle’s downswing and that non-performing loan ratios remain at historical lows. In this context, there is no immediate need to adjust the countercyclical capital buffer rate.

Also in this edition

• Domestic banks remain in good shape
• Insights from the latest financial stability research

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