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22 June, 2024
 
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Why do young people in Cyprus struggle to secure a home loan?

Economist Tasos Yasemidis discusses the factors affecting mortgage loans for the new generation and proposes two solutions

Young people are facing difficulties in securing mortgage loans due to a number of factors, according to economist Tasos Yasemidis.

Speaking on the "DIASPORA NEWS" show on "SPORT FM 95.0", Yasemidis outlined the three main factors that are influencing the issue. Firstly, there has been a large increase in real estate prices due to external demand and rising construction costs. However, there may be a decongestion early next year. Secondly, with the increase in interest rates, installment payments also increase, making it harder for many to afford. Finally, many cannot afford the installments because their incomes are not sufficient to meet the plans drawn up by the banking institutions.

To address this issue, Yasemidis suggests two solutions. The first is for the state to implement housing policy programs and assume responsibility for a certain amount of the loan so that banks can provide lending to young people.  The second is to implement measures to decongest the increase in real estate prices.

In relation to the economy, Yasemidis warns that a slowdown is coming due to the cycles of interest rate increases that will close at the end of the year. This will affect the growth of economies as the goal of Central Banks is to remove liquidity from the market, reducing consumption, investment, and other business activities.

Despite this, Yasemidis assures that the banking institutions in Cyprus are sufficiently capitalized and have enough liquidity to absorb any shocks.

Source: DIASPORA NEWS - SPORT FM 95.0 with Oriana Papantoniou

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Cyprus  |  economy  |  loans

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