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Review after two years of “First home” scheme: Has it achieved its purpose?

"The scheme started by the Government nearly two years ago in order to revive the construction sector and the economy, has turned into a social one that has supported banks, put an end to the price decline, and enabled 40,000 Romanians to buy homes with low down-payments, but at interest rates that even multinationals in Romania can get for their employees.
But the fourth variant of the scheme is very likely to be the last, writes BUSINESS CONSTRUCT magazine, in its May issue.
"We are supporting the lending revival and the unfreezing of a major economic sector- the construction sector with state guarantees," premier Emil Boc said in July 2009, when the first loan was granted via the First home scheme, seen as one of the active measures of relaunching the economy.

The relaunch did not come in the first two years, considering that the construction market fell by 25% during this interval, and around 15% was wiped off the GDP. In the meantime, the state has guaranteed loans for home acquisitions worth over 1.6 billion euros, whose final "bill" will come due in 20-30 years' time.

Between July 2009 and February 2011, the population's deposits rose by around 2.7 billion euros. How much of the money guaranteed as part of the First home scheme returned to the banks? There are no data available, but while banks were granting risk-free loans at an interest of 5.5-6% through the First home scheme, depending on EURIBOR, interests on deposits in euros reached 3.3% on average.

In other words, this has proven a good scheme for banks, all the more since real estate/mortgage lending in the last two years has been largely based on this programme: in the past two years the overall number of mortgage/real estate loans went up by around 40,000-50,000 to 210,000, according to the Credit Bureau, with nearly 40,000 loans being granted through the First home scheme." sursa ZF