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The second half of 2025 is expected to reduce the value of loans that banks will provide for the purchase of housing, as well as to be accompanied by an increase in lending conditions. This is stated in a survey by the Bank of Albania, where banks have warned of a 'slowdown' in loans for the purchase of property, influenced by loan restrictions for citizens who want to buy a home.
Getting a loan won't be any easier for citizens who want to buy a home. Banks in the country are warning of tightening the terms of loans they provide to finance the purchase of a property during the third quarter of this year.
The decision of the Bank of Albania to limit the value of the loan that banks provide for the purchase of property, as well as the ceiling set for the monthly installment, is having an impact on strengthening the conditions that must be met to approve a home purchase loan.
These restrictions will not only automatically tighten credit conditions, but will also dampen citizens' demand for loans for this purpose. At least, this is the perception of banks for the third quarter of the year.
"Credit policies are expected to be tightening for individuals, mainly in the segment of loans for the purchase of housing. In the third quarter of 2025, banks expect demand for credit to decline, mainly in loans for the purchase of housing ," the Bank of Albania report states, reports "Shqiptarja ".
From July 1, restrictions began to be implemented that prohibit banks from granting loans above 85% to finance the purchase of the first property, and also limits the value of the monthly loan installment to 40% of the borrower's total income. These figures are only for the first home, as for the second and subsequent ones the loan ceiling is reduced to 80% and 35% respectively. Meanwhile, when the loan is requested in foreign currency, the ceilings are even lower, up to 75-70% of the property value.
These restrictions were imposed to protect banks from high exposure to real estate, as at the end of 2024 the total loan granted for housing purchases exceeded 2 billion euros, up from 1.8 billion euros at the end of 2023.
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