- Political stability
- Fiscal affairs
- Monetary policy
- Regulated markets
- Privatisation
- Macroeconomic developments
submited on 15.03.2012 in category Political stability | Monetary policy | Macroeconomic developments
Industry Watch distributed among its subscribers the regular quarterly report “Personal Assets in Bulgaria: Financial Wealth and Housing Market, Q1 2012”. Here are the highlights of our research.
The household financial wealth kept on steadily increasing in 2011 – by some 13% y-o-y, reaching €22.9bn. The contraction of the non-mortgage (consumer and other loans) debt led to even higher acceleration of the net financial wealth growth – to 19% y-o-y.
The effective annual yield on the bank deposits of households amounted to 4.1% - considerably higher than other European countries', albeit 1 percentage point lower than the highest values before the crisis onset.
In the quest for higher yield households moved some of their funds from short-term (with maturity of up to 3 months) to longer-term deposits. In result, the short-term deposits with maturity from 1 day to 1 month and from 1 month to 3 months fell, by 15% and 24% y-o-y, respectively, while deposits with maturity between 6 and 12 months grew by 33% y-o-y, reaching €4.7bn as of end-2011 being €3.5bn in 2010. The faster growth of longer-term deposits implies that households do not plan on substantially increasing their discretionary consumer spending in H1 2012. During the period 2008-2011 time deposits increased by €4.1bn, piling up to €11.2bn in total as of end-2011.
The total (financial and housing) wealth of households reached €71.6bn as of end-2011, growing only marginally - by 1% within the last 12 months, mainly due to the surge of financial assets, while housing wealth continued to decrease.
The household debt is owed primarily to banks (91% of the debt) and to a smaller extent to fast-loan companies (8%) and leasing companies (1%).
The average housing prices kept on falling – down to €454 per sq.m. in Q4 2011 from €461 per sq.m. in Q3 2011. As in previous quarters, the pace of decline of residential properties is 6% y-o-y on average for the country.
On one hand, residential housing is becoming more and more affordable to individuals with stable and increasing income, but on the other, the growth of housing credit fell below 1% y-o-y. There is some increase of market activity, as buyers are relying more on personal savings rather than mortgage loans.
This report is a regular analysis of financial intermediation, household wealth and the housing market. The analysis is based upon economic methodology, which makes it suitable for use by finance professionals, macroeconomists, and specialized business analysts.
The full report in issued quarterly. Subscribes have access both to ready-to-print document, as well as a detailed database.