State Loan Programme For Young Families Populist: Experts

Prague, Aug 16 (CTK) – The state loan programme for young families under 36 years that started on Wednesday will not improve the availability of housing and it is a populist step of the politicians, experts have told CTK.


People waited overnight to apply for a loan within the State Housing Development Fund (SFRB) programme for young families, which got 256 applications worth 299.2 million crowns the first day, fund spokeswoman Karolina Smetanova has told CTK.


The loans are intended for young married couples or registered partners with at least one in the couple under 36 years or single applicants looking after at lest one child under 15. The couples may ask for a state loan of up to two million crowns for the reconstruction of their housing or purchase of a new one. The state earmarked 650 million crowns for this purpose in 2018.


“This is just a drop in the ocean with regard to the volume of the mortgage market in the Czech Republic. This year, Czechs have been closing mortgage deals worth 17.45 billion crowns a month on average. In a single month, almost 27 times as much money goes to mortgages than into the respective state loan programme for the entire rest of the year,” Cyrrus analyst Lukas Kovanda told CTK.


In the most, the programme with an allocation of 650 million crowns can help only hundreds of people in the country and in towns where the prices of real estate are low, added Pavel Kliment, from the Association for Architecture and Development.


In Prague, the loan suffices for 13 square metres.


According to Kliment, politicians should instead launch an offer of flats.


Some politicians share this view.


“With regard to the current prices of real estate in Prague, the loan size is completely inadequate. One can only acquire a better garage for 1.5 million crowns in Prague,” Social Democrats (CSSD) candidate for Prague mayor Jakub Landovsky said. According to him, determining the loan size according to the price map would be a solution.


“Price maps are respected today and are used to calculate rent, for instance. We want the loans in Prague to be higher than in other towns. Because the flats simply are more expensive here,” he noted, adding that the CSSD is elaborating the particular draft.


Bidli Real Estate agency director Ondrej Masin believes that in the regions where the property prices are low, such as in the Usti (north Bohemia) or Karlovy Vary (west Bohemia) regions, the loan for the young makes sense. However, it does not reach the average property prices in Prague, the South Moravia or Central Bohemia regions. The long period of closing the loan deals is another disadvantage, he said.


Chytry Honza mortgage specialist Daniel Hornak said a classic mortgage was the only possible solution, apart from living in expensive rent accommodation, as it is not limited by size, but by the income of the household instead. Since October, however, the Czech National Bank (CNB) has tightened up the terms for the acquisition of mortgages.


“I would rather expect the state to help by constructing state housing for lease, which would help start life for young families,” he added.