In 2020, the moratoria reduced the repayments of housing loans. However, even adjusting for the effect of the moratoria, the outstanding amount of housing loans increased in the course of the year and accelerated in the second half.

Lending flows for house purchase changed significantly over the course of 2020. In the second quarter of 2020, restrictions on mobility and the normal functioning of activity, fears of contagion and high uncertainty lead some households to postpone house purchase decisions or early loan repayments. In this period new loans for house purchase and early repayments decreased significantly. As of the third quarter, an improvement in the health situation and a recovery in activity led to an increase in flows associated with housing loans. In December 2020, the total amount of new loans was greater than in the period prior to the pandemic, keeping pace with developments in the value of housing transactions.

For more details see Box 2 “Changes in lending flows for house purchase”, published in the Economic Bulletin of Banco de Portugal, May 2021.

Prepared by Sónia Costa and Luís Martins. The analyses, opinions and findings expressed above represent the views of the authors and not necessarily those of Banco de Portugal or the Eurosystem.

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