Romania's central bank expects 10% drop in house prices due to mortgage law

The law on mortgage loans will lead to a 10% drop in the house prices at least on the short term, said the central bank deputy governor Liviu Voinea. This will also bring a EUR 2,000 decrease of the average household net wealth, he added, reports local Agerpres. The wealth is made up of financial and non-financial assets, and the main non-financial assets are real estate properties, Voinea explained. At a 10% drop in real estate prices, the overall household net wealth in Romania would go down by 6.3%, namely by about RON 60 billion (EUR 13.4 billion). The law on mortgage laws, which is now debated in the Parliament, allows the mortgage debtors to get rid of their debts by giving the mortgaged assets to the banks. This law would also increase interests on mortgage loans. editor@romania-insider.com