Real estate and mortgage lending further slowed down in November 2006, for the second month in a row.

The amount of these loans in November 2006 rose by only 3.8%, to 7.83 billion RON (2.28 billion euros). In October, mortgage lending had posted a 4.7% increase, and a more than 7% increase in September.

Consumer lending also slowed down last November, with the population borrowing less given the rising financing costs. During 2006, both the NBR and the ECB tightened their monetary policies, so that loans, both RON and foreign currency-denominated ones, became more expensive on the domestic market.

However, the pace registered in November was slightly quicker than the one posted in November 2005, when lending went up by only 3.5%. In December 2005, it slightly accelerated, managing an almost 4% increase.

The slower pace registered last November was triggered by the slower progress of the foreign currency financing, which increased by only 3.3%, half the pace of September. Almost 85% of real estate financing is foreign currency denominated, so that any slowdown on this segment considerably impacts the dynamics of the overall amount. As a matter of fact, RON-denominated lending accelerated in November, expanding by 7.1% against 6.2% in October. This was not sufficient, though, to keep up the pace of the overall mortgage lending.

Mortgage lending had a slightly quicker annualised expansion pace last November, to 55%, as monthly increases, though weaker, stayed above the ones posted in 2005.

RON-denominated mortgage lending maintains a very fast annualised growth pace, though it slowed down in November to 141%, from a peak of 178% in September. Instead, the annualised growth pace of foreign currency mortgage lending slightly accelerated, from 44% in October to almost 46% in November.

Almost 40% of mortgage and real estate loans ar