Late yesterday, leu stabilized to nearly 3.95 lei/euro after plunging to four-year lows, 3.98 lei/euro. Specialists surveyed by Wall-Street explained at which extent this meltdown will affect individuals with pay packages in lei and their installments for housing loans contracted in single European currency.
Ilinca Paun, Head of Residential Department at Colliers International says leu’s downslide will affect individuals with pay packages in national currency and have to pay installments for housing loans contracted in national currency, but this effect will be cushioned by NBR’s lending conditions that have limited the indebtedness level to 40% of income.
“A 8-10% raise of installment geared by a depreciation of leu leads to a lift of indebtedness level to 40%, without causing major problems. Individuals who contracted loans last year, and the installment is 60-70% of income will surely face difficulties and will cut daily expenses in order to be able to pay installment,” Ilinca Paun explained.
Ionut Bordei, Head of Residential Department of CBRE/Eurisko said leu’s decline will not affect developers or constructors.
“Prices of real estates are in euro. Same are the construction costs. The only ones that might be affected will be buyers with pay packages in lei. Individuals with incomes in euros will not reel from national currency’s drop,” Bordei added.
According to him, leu’s depreciation will lead to a boost of interests at loans in lei, which will affect at certain extent those who contracted loans in lei, whereas this is a fact that can not be generalized, as the currency exchange rate has its ups and downs, and people can win or lose in very short intervals.
Andrei Panculescu, director at Westhill Romania says domestic real estate industry is not very tightly linked to evolution of leu against euro, considering that rents i
