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Forint-denominated mortgages down by half in January-June

Forint-based mortgage lending dropped by an annual 54% in the first half of 2011, even though foreign-exchange housing loans are no longer available, business daily Napi Gazdaság  reported, quoting calculations based on National Bank of Hungary figures.

All the banks polled by the paper confirmed the trend so far, and few expect the situation to change this year.

An Erste Bank analyst, however, saw no signs of recovery, saying that new homes are not being built while the market for established houses is slack and clients are unwilling to assume new debt.

It is no longer possible to obtain new mortgages denominated in foreign currencies, while households with FX-based loans are experiencing serious trouble due to the surging Swiss franc.

Analysts with Budapest Bank were cautiously optimistic, however, reporting a slight increase in mortgage lending in May and June, and hoping for an upswing in the second half of the year.