MORTGAGE DEMAND DROPPED IN LATE 2007

Mortgage demand from families wanting to buy houses dropped in the fourth quarter of 2007. This was reported by the ECB in its monthly bulletin, referring to a survey on banking credit in the euro zone by the Eurosystem in which a stiffening up of criteria for granting families loans was seen. "Over the past three months banks have signaled that criteria for granting loans to families have become even more rigid (21pct from 12pct in the previous survey)." This situation reflects the "deterioration of conditions on financial markets and the drop, compared with the previous quarter, both in expectations for general economic activity and market prospects for residential real estate."