The demand for housing credit by individuals recorded a slight increase in the third quarter of 2024, according to the survey conducted by the Bank of Portugal (BdP), shared by Notícias ao Minuto. This increase was mainly seen in the housing segment, while the demand for credit for consumption and other purposes remained virtually unchanged, as did the behavior observed in companies.

Among individuals, the increase in demand for housing credit was attributed to factors such as the regulatory and tax regime of the real estate market, as well as, to a lesser extent, consumer confidence. However, regarding consumer credit, demand remained stable.

Regarding companies, the survey showed that the demand for loans remained virtually unchanged, regardless of the size of the companies or the term of the loans. However, a trend observed was the increased use of internal fund generation, an alternative that slightly helped reduce the demand for business credit.

For the last quarter of 2024, banks expect a slight increase in demand for credit from companies, especially small and medium-sized enterprises (SMEs), as well as long-term loans. Among individuals, the forecast is for a small increase in demand for housing credit, while consumer credit is expected to remain stable.

On the supply side, the credit granting criteria have not undergone significant changes, both for companies and individuals, whether in housing acquisition or consumption.

There was a slight decrease in interest rates and in the spread applied to loans of medium risk, especially for SMEs. Housing loans saw slightly more restrictive conditions, while conditions remained unchanged for consumer credit and other purposes.

Competition among banking institutions was another factor that impacted business loan conditions, leading to a slight decrease in interest rates and spread.

The number of applications for rejected loans remained stable for companies, but experienced a slight increase for individuals, both in the housing sector and consumer credit.

For the last three months of 2024, respondents predict that credit granting criteria will remain virtually unchanged, both for companies and individuals.

This panorama reflects a slight recovery in the housing credit segment, while other sectors maintain overall stability, with few significant variations in the credit market until the end of the year.

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