AMRON-SARFiN Reports

The housing loan market, awakened in the second quarter of this year, is growing. In the third quarter of 2025, banks granted 64 796 housing loans with a total value of over PLN 29 billion, which translates into quarter-on-quarter increases by more than 16% and 18%, respectively. On an annual basis, these increases amounted to 41% and 51%, respectively. At the end of the third quarter of 2025, the average value of a newly granted mortgage loan exceeded PLN 450 thousand.

After four quarters of stability on the mortgage market, which turned out to be necessary to recover from the disruption caused by the ‘2% Safe Loan’ programme, lending activity accelerated again in Q2 2025. Compared to Q1 2025, the number of new housing loans increased by over 15%, while their total value – by as much as 21%. On a year-on-year basis, the increases amounted to 22% and 29%, respectively. During this period, banks issued 55 519 housing loans with a total value exceeding PLN 24 billion. The average value of a new mortgage also increased significantly, reaching more than PLN 443 000 at the end of June.

The results of Q1 2025 confirmed the high stability of the mortgage loan market, which has characterized this market for the past three quarters of 2024. Between January and March of this year, banks in Poland concluded over 48 thousand loan agreements for a total amount of PLN 20.4 billion. Although this result was by 25% lower compared to the first quarter of last year, it should be remembered that a year ago the banking sector was still finalizing the last loan applications from the ‘2% Safe Loan’ program from 2023. When we look at the results of the last four quarters, it can be seen a slight but systematic increase in both the number and value of loans granted. However, the trend of increasing the average value of newly granted mortgage loans has slowed down, with the average at the end of Q1 2025 amounting to PLN 425 thousand.

hroughout 2024, the housing and loan markets were marked by a certain level of tension and anticipation for the new loan for 0% announced during the 2023 election campaign and later confirmed at the beginning of 2024 as ‘Loan for Start’ programme. This uncertainty affected potential beneficiaries of the programme, who delayed their decisions to take out a housing loan and purchase an apartment, as well as homeowners on secondary market, who maintained high offer prices in anticipation of another wave of buyers benefiting from the government support. Developers also hesitated in launching new investments, despite having obtained building permits. It’s a pity that it took 12 months for the government to announce in December 2024 that this programme would not be implemented.

We are gradually leaving behind the ‘2% Safe Loan’ programme, and hopes for zero-interest loans seem to be fading, especially given the disappointment with the previous product. Analysing the results of banks’ lending activity and changes in residential market transaction prices, one might argue that the housing market is normalizing. It would be even better if interest rates were slightly lower. In the third quarter of this year, the number of granted housing loans amounted to 45,879, which was practically the same result as in the previous quarter (a slight increase by 1%). This quarterly level of mortgages translates straightforwardly into an annual result of approximately 180 thousand loans.

This was an extremely interesting period for analysing the behaviour of housing market participants after disruptions caused by the boost provided by the ‘2% Safe Loan’ programme. This programme pushed buyers to make quick, not always well-considered decisions to purchase whatever was available. Some are still waiting for the promised zero-interest housing loan announced in the draft law on housing loans #forStart. However, the number of people encouraged to buy their dream home is growing due to increasing creditworthiness, more attractive interest rates offered by most banks, now below 7%, and the reappearance of discounts or bonuses from some developers, such as free parking spaces.

After last two quarters of 2023, when lending activity and the housing transaction market were driven by the electoral hit called “Safe Credit 2%”, it was obviously hard to expect that the results of the first quarter of 2024 would maintain this upward trend. Instead, in the first quarter of this year there was a decrease in sales of new housing loans compared to the results of the previous quarter, both in quantitative and value terms. From January to March this year, banks concluded 64 504 loan agreements for housing purposes, which was 6.33% less compared to the fourth quarter of 2023. The decline is small, as this number of newly granted loans includes over 32 000 loans from the “Safe Loan 2%” programme that were not concluded last year. The total value of granted housing l

Due to the ‘2% Safe Loan’ programme, the mortgage market in 2023 noted much better results than in 2022, the year of mortgage lending collapse. Despite this pre-election housing programme, which significantly improved the situation on housing and the mortgage loan markets, the banking sector achieved results comparable to those from 2004, i.e. 19 years ago. Of course, only in terms of the number of housing loans granted – 162 thousand. The value of lending in 2023 at the level of PLN 62.8 billion was more than four times higher than in 2004, when it amounted to PLN 15.2 billion.

After the collapse of mortgage lending in the second half of 2022, we have been observing an increase in lending since the beginning of this year, which has accelerated in the third quarter of this year only as a result of the government’s ‘2% Safe Loan’ programme. However, it is definitely too early for the commonly held opinion about the lending boom. The number of housing loans granted in Q3 2023 accounted for 40 749, which was by 32.31% more in comparison to the previous quarter. The value of newly granted mortgage loans amounted to PLN 15.843 billion, which meant an increase by PLN 4 543 million, i.e. 40.20% more in comparison to the second quarter of this year.

The results of the second quarter clearly confirmed the reversal of downward trends in lending observed already in the first quarter. After five quarters of dynamic declines in banks’ lending activity, the first quarter of 2023 brought increases in both the number and the value of newly granted housing loans and this trend has strengthened in the second quarter. However, the scale of mortgage lending remained at a very low level, and the high growth dynamics was primarily due to the base effect, i.e. very poor results of 2022. This revival of housing loans market was influenced by the Monetary Policy Council, which has maintained a stable NBP reference rate at the level of 6.75% since September. It resulted in gradual decrease of WIBOR 3M index to the level of 6.90% at the end of the second quarter.

After the last five quarters of dynamic declines in banks’ lending activity, the first quarter of 2023 brought increases in both the number and the value of newly granted housing loans. However, the scale of mortgage lending remained at a very low level, and the high growth dynamics was primarily due to the base effect, i.e. very poor results of 2022. This revival of housing loans market was influenced by the Monetary Policy Council, which, after eleven monthly decisions to increase the NBP interest rates, has maintained a stable NBP reference rate at the level of 6.75% since September. It resulted not only in slowing down the increase of WIBOR 3M index in November 2022 at the level of 7.60%, but led to its gradual decrease to the level of 6.90% at the end of first quarter.

or the mortgage sector, 2022 was a period of downhill from the slope it has been climbing since 2014. A series of successive increases of the basic interest rates, initiated in October 2021, resulted in even higher increases in the WIBOR ratio, making mortgage loan more and more expensive. We entered 2022 with the NBP reference rate at 1.75%, but we closed it with the reference rate at the level of 6.75%. Rising cost of living combined with high interest rates on loans resulted in decrease in availability of flats. The Housing Availability Index M3, monitored for 14 years by the AMRON Centre, dropped from the level above 200 points, which had been maintained for the last 5 years, to a level similar to the one recorded in 2012.

The third quarter of 2022 brought a further decline in lending. Due to the decisions of the Monetary Policy Council taken in July and September 2022, NBP reference rate increased only by 0.75 p.p., to 6.75% at the end of the third quarter. On the other hand, however, the WIBOR index raised regardless the MPC’s decisions. At the end of the third quarter of 2022, WIBOR 3M, the crucial component of mortgage loans’ price and interest rate equalled to 7.16%. In addition, the assessment of the creditworthiness of potential borrowers has been effectively undermined by Polish Financial Supervision Authority recommendation, applicable since April this year, to use an increased safety buffer of 5 pp in the creditworthiness analysis process.

The second quarter of 2022 brought a further tightening of banks’ lending policy with regard to housing loans. This is the result of both subsequent, already 9 increases in NBP interest rates, as well as implementation of Polish Financial Supervision Authority’s recommendations regarding increased safety buffer up to 5 percentage points in creditworthiness analysis process. By the way, extending this recommendation also to loans with a fixed interest rate seems to be a nonsense.

The narrative about the real estate market environment has definitely started to change. In last few reports, commenting events on mortgage and housing markets, we referred mostly to the impact of the coronavirus pandemic on recorded results. Today, because of war going on for three months in Ukraine, we have practically forgotten about the pandemic. Aggression of the Russian Federation on Ukraine on February 24 had a number of negative consequences for the housing construction sector, in particular in terms of workforce availability. A significant number of refugees from Ukraine has completely changed the situation on rental market, putting strong pressure on rent increases. Effects of the Russian Federation’s aggression are evident when it comes to numbers describing Polish housing market in the first quarter of 2022 and we will face them for following quarters.

Despite continuous state of a public health emergency linked to the COVID-19 pandemic, the year 2021 turned out to be a very good, or even record-breaking time for both mortgage lending sector and housing market. Number of completed housing units reached the record level of nearly 235 thousand of flats and houses. Such results of housing construction were noted in Poland in the 70s of the last century. The total value of newly granted mortgage loans was also impressive. The amount of over PLN 86 billion was the highest ever recorded in the history of mortgage lending in Poland.

Although the third quarter of 2021 was a time of tightening of the lending policy criteria by some banks related most of all to amended Recommendation S provisions, the dynamic trend of lending growth observed in the previous quarters did not slow down. At the end of the third quarter of this year, the number of active housing loan agreements in Poland reached the level of 2 538 814, and the value of the active housing loan portfolio exceeded the barrier of PLN 500 billion for the first time. During this period, 68 353 housing loans were granted, which is 2.00% more than in the previous quarter and as much as 40.12% more than in the corresponding period of 2020.

During the second quarter of 2021, the continuous upward trend was observed both on housing and mortgage markets. Increase in the average value of newly granted loans also continued – in Q2 2021 it reached the level of almost PLN 330 thousand. Such an outcome resulted from growing disproportion in newly granted loans – from several quarters, share of loans granted for higher amounts, particularly those for PLN 500 thousand and more, has been consequently growing, while share of loans for the amount not exceeding PLN 300 thousand has been diminishing. Increase in the average mortgage loan amount was correlated with increases in housing prices.

Despite ongoing pandemic threat, in the first quarter of 2021 both residential and credit markets remained in an upward trend. The average value of a housing loan rose dynamically as well. After a historic record noted at the end of 2020 at the level of 305 thousand, the first quarter of the current year brought further increase to PLN 313 thousand. Observed increases resulted from the factors that we defined after a short “covid” shock in the second quarter of 2020 – historically cheap mortgage loans and lack of an alternative way to invest capital. Therefore, flats are bought both by those who can afford a loan and by those who have significant savings. Rapidly rising inflation level is a new, though expected factor, shaping the situation in the housing market environment.

Despite the pandemic threat, the year 2020 turned out to be a good, or even very good year both for the mortgage loan sector and the housing market. The record number of completed flats and single-family houses reached 222 000 units. Such results were achieved by housing construction in the seventies of the last century! Total value of mortgage loans granted in this pandemic year was also impressive. With total amount exceeding PLN 60 billion, banking sector achieved the second lending result in the post-transformation period. It was also a good year for the AMRON Center. During the pandemic period, AMRON database grew by over 212 thousand new records on transaction prices and property valuations, exceeding the level of 3.5 million records in total. This is a very good result, especially  taking into account that in 2020 banks granted over 204 thousand mortgage loans.

The first shock caused by the pandemic brought a sharp decline in demand for housing loans observed between March and May, but a gradual recovery started already in August. After tightening the terms of granting housing loans in the first months of the pandemic, in a second half of the year banks began to ease their lending policy criteria. In comparison to 2019, the number of applications for a housing loan submitted in 2020 decreased by only 0.6% and the number of granted loans was lower by 9.3%. It is worth emphasizing that this type of loan recorded the lowest decrease in demand compared to all loan products. At the end of the year, the average value of a granted mortgage loan reached a historic record level of PLN 305 thousand.

One of the most important factors determining such high lending results was a series of National Bank of Poland interest rates cuts, introduced by the Monetary Policy Council on March 18 (to 1.0%), April 9 (to 0.5%) and May 29 (to 0.1%). Combined with still disturbing level of inflation and money reprinting announcements that limit the confidence in its future value, such low interest rates questioned the profitability and reasonability of saving money on bank deposits. Therefore, it can be said that the Monetary Policy Council, with its decisions, sent Poles for shopping, including, and perhaps most of all, for purchases on the real estate market. At the end of 2020, total number of active housing loans reached the level of 2 472 thousand and the total debt on this account amounted to PLN 476.3 billion.

The year 2020 brought a dynamic increase in share of housing loans granted in the largest Polish agglomerations. At the end of the year it amounted to 73.46% and was higher than in the previous quarter by as much as 6.31 p.p. The share of Warsaw market in the structure of all newly granted loans in Poland in geographical terms reached a record level of 49.44%. Compared to the corresponding period of 2019, Warsaw’s share in the mortgage loan market was higher by as much as 10.46%.

At the end of 2020, the average mortgage loan margin accounted for 2.28%, i.e. by  0.18 p.p. higher than at the end of 2019. As a result of a significant reduction in interest rates by the Monetary Policy Council, the average interest rate of a mortgage loan at the end of 2020 was equal to 2.49%, i.e. it was lower by 1.33 p.p. compared to the end of 2019.

Despite the second wave of the COVID-19 pandemic and related restrictions, as well as pessimistic information from the rental market, housing markets in the largest Polish cities remained stable. The situation in the fourth quarter of 2020 was shaped by the same factors as in previous periods, which include first of all cheap mortgage loans, no alternative means of money investing and high price availability of apartments. However, the AMRON Centre data show that the fourth quarter of 2020 brought a clear decrease in the dynamics of price increases in most of the analyzed markets. In case of five of them (Katowice agglomeration, Wroclaw, Gdansk, Poznan and Lodz), change in the average price per square meter of a flat did not exceed one percent.  Warsaw was the leader in terms of price increase – an average price per a square meter of a flat in Q4 2020 was PLN 10 081 i.e. by 5.36% higher than recorded a quarter earlier. The largest decrease in the average price, by 1.44%, was recorded in Cracow (to the level of PLN 8,015). Compared to the numbers recorded at the end of 2019, the largest increases in the average price of flats were recorded in the Katowice agglomeration and Lodz – by 15.52% and 12.19%, respectively. In Warsaw, the average price rose by 11.75%.

If any segment of the real estate market has suffered from the coronavirus pandemic, it certainly was the segment of apartments for rent. A year ago, the expected return on rent exceeded 6% annually. Today, the level of 3% seems to be satisfactory. Introduction of remote classes at universities and remote work by a large number of companies,  restrictions in tourist traffic and – as a consequence – decrease in demand for short-term rent are the most important factors that determined the rent rates reductions. Decreases started already in the second quarter of 2020 year, deepened in the third quarter and slowed down at the end of 2020. The fourth quarter of 2020 brought reductions in private rent rates in all analysed cities. The average rent for a flat in Warsaw in the fourth quarter of 2020 amounted to PLN 1 666 and was lower than in the previous quarter by 2.83%. The deepest decline was recorded in Cracow and Gdansk. In Gdansk, the decrease in the average rent accounted for 4.34%, while in Cracow – 4.95%. Cracow market seems to be the most affected by the difficult situation on the rental market. This is because of the very high number of absent students, as well as the large number of flats available as short-term tourist accommodation. In annual terms, the decrease in the average rent in Cracow amounted to 16.05%.

Will 2021 be a period of continuation of the current trends? Forecasting for 2021 are of course extremely difficult. Any forecasting attempt should be taken with great reserve, as there are so many variables that can affect the market make.

In AMRON Centre’s opinion, transaction prices per square meter will continue to grow this year, although at a much slower pace than in 2018-2019 years. The price increases will also result from higher construction costs, caused among others by the new energy efficiency requirements for buildings. In addition, supply will be under pressure due to still difficult situation on the building land market. On the other hand, rents will stabilize at a lower level, adjusted in the last quarter of 2020.

The housing market remains instable. Poland is still on the last or one before last place in EU countries rankings of satisfying citizens’ housing needs. High deficit of flats is still a fact, which means that new flats will find buyers. The sale of apartments in 2021 will depend on the offer on the primary and secondary markets. Low interest rates – following the assurances of the President of the NBP to keep them unchanged in the following year – will continue to be an important factor stimulating the demand for flats. We all expect a COVID-19 vaccine that will allow us to return to normal life. We are also waiting for the inflow of European funds, including sources from the reconstruction fund, which will ensure a sense of employment stability, crucial for consumers making decisions about large expenses or incurring long-term liabilities.

On the other hand, worsening situation of banks in Poland may be a threat to mortgage lending. Banks will not be able to cope with it by themselves, as they have no influence on two the most important ones. The first is possible deterioration of repayment quality of loans granted in previous periods, caused by economy freezing, which may result in e.g. lower wages and sometimes job losses for borrowers. The labour market, however, may also revive in the event of a possible dynamic growth in the second half of 2021. The second threat, much more dangerous in terms of banks’ financial burdens, is related with possible  intensification of the Swiss franc borrowers claims and continuation of the current line of adjudication by the courts in this matter.

For years, Polish Banks Association has consistently recommended the implementation of solutions and financial instruments that ensure incomparably more effective meeting the citizens’ housing needs in neighbouring countries. Systematic, long-term and universal solutions are indispensable. In our common interest we must understand the sense of collective effort and accept the commitment of public funds to meet housing needs. But these must be effective measures that build and strengthen confidence in the state and community.

The government’s housing policy should ensure the availability of rental housing, but should not impose such an option. It is in the interest of the economy, but also in building the well-being of citizens, to inspire and support the pursuit of housing ownership. In developed economies, housing ownership is an important element of retirement benefits.

In the middle of last year, Polish Banks Association together with the Entrepreneurship Council, addressed Prime Minister Jarosław Gowin with a wide range of necessary activities that should be implemented. In the Entrepreneurship Council’s opinion, such long-term and systemic solutions will allow to improve the housing situation of Polish families and to use the housing development program both as a way to overcome the pandemic crisis, as well as one of the pillars of sustainable development and economic recovery in our country.

In many countries, national housing programs appeared as a way to overcome economic crises. At the moment in Poland it would be additionally favoured by low interest rates. This is a good time to launch a fixed-rate loan, to launch a fixed-rate contract loan in the formula of building savings banks and finally to improve the lame process of issuing and trading in mortgage bonds. There are many proven ways and mechanisms to accelerate this economic flywheel, which the housing construction can and should be. It is enough for persons responsible for Poland to have a will to implement them.

The basis for success can only be an efficient system of financing housing construction. Since Poland’s accession to the European Union in May 2004, the only permanent and effective instrument guaranteeing the development of housing construction is a bank mortgage loan, including a Swiss franc loan, which enabled the implementation of nearly 3 million housing investments.

Jacek Furga,Ph.D.
Head of AMRON Centre

After a significant slowdown in activity on the housing and mortgage markets in the second quarter, resulting mainly from government-imposed restrictions on personal mobility, the third quarter of 2020 saw a return to an upward trend in both the construction and credit markets. Compared with the same period of the previous year (Q3 2020 / Q3 2019), mortgage lending results were – understandably – weaker. The number of loan agreements concluded was 18.3% lower, and their total value decreased by 16.2%. However, compared with the previous quarter, growth amounted to nearly 8% in terms of the number of loans and 5% in terms of value.

Fortunately, both Polish society and Polish economy, in particular the housing market, were treated quite gently by the pandemic. After a suspension of activity on the housing and loan market at the end of March and especially in April, resulting mainly from government restrictions of personal mobility, the activity of market participants has slowly reactivated in the following months. The postponed buyers’ decisions on the housing purchase, especially on secondary market, resulted from the common expectations for a significant reduction in transaction prices.

In Q1 2020, once again, a slight increase in sale of new housing loans was noted in comparison to the previous quarter, both in terms of number and value. In this period, banks in Poland concluded 56 453 housing loan agreements, i.e. by 1.82% more than in the previous quarter. The total value of newly granted mortgage loans accounted for PLN 16.623 billion, which meant an increase by 5.78%. This good results were noted despite the ‘freeze’ of the Polish housing and loan market in mid-March 2020. In comparison to the same period of 2019, in Q1 2020 the number of newly granted housing loans increased by 11.57%, while total value was higher by 22.26%. The average value of housing loan in Q1 2020 amounted to PLN 293 833, which was more by almost 4% in relation to Q1 2019, and in April it exceeded PLN 300 thousand.

During the whole year 2019, 225 073 new housing loans of a total value of PLN 62.629 billion were granted in Poland, which was more respectively by almost 6% and over 16% in comparison to the results recorded in 2018. This meant that the lending result in 2019 in terms of volume was the best since 2010, while in terms of value it was the best result in history. The increase in value of housing loans granted in 2019 was largely due to the growth of the average value of a loan – by almost 10%. At the end of 2019, total number of active housing loans amounted to 2 389 311, and total value of households debt accounted for PLN 443.1 billion. As in previous years, the situation on housing and mortgage markets was influenced the most by favourable economic conditions and increase in salaries, as well as record-low NBP’s interest rates, which provided low mortgage servicing costs and encouraged to look for alternative investment options for bank deposits.

According to signals coming from developers’ sector, the primary market is stabilizing (read: decelerating). However, the newest data published by the Central Statistical Office confirmed the good situation on the housing market in Q3 2019. During this period, 51 021 dwellings were completed and construction of 63 052 apartments was started, which was more by 8.31% and 2.50% respectively in comparison to the previous quarter. At the same time, construction permits were issued for 71 736 housing units, which meant that the record-breaking result from the previous quarter was repeated. The results of the first three quarters of 2019 suggest that 2019 may be another record-breaking period in the construction activity of developers’ sector.

The situation on housing market is getting to be interesting. For several quarters, analysts and market observers have predicted that the number of construction permits issued and dwellings completed by developers ware to steadily decrease and developers’ sale results would be weaker. And market seemed to confirm that predictions. On the other hand, banks began to be more cautious about housing lending and therefore a slight increase in loan margin was noted. Dwellings prices also increased but it was not the result of limited supply. And now, in the middle of summer, despite the holiday season, housing market caught a second wind, perhaps due to unprecedented heat.

The Polish households financial security increased, although it was built on government declarations and social transfers. On the other hand, the media created the image of investing in dwellings for rent as attractive. That is why the atmosphere on the residential investment market has still been warmed up. In addition to buyers looking for dwellings for short-term rent, the new group of investors in house flipping has emerged, looking for the cheap dwellings in poor condition on secondary market for renovation in order to quick resell. What is more, the housing loan availability in Poland increased and the President of NBP declared the stability of low interest rates. The dynamically growing average value of a housing loan was a clear confirmation of the growing availability of mortgage loans. On the other hand, a weakening developers’ enthusiasm for starting new investments encourages to accelerate the decision to invest in a flat.

Most observers and analysts were surprised by the results on both housing and loan markets in 2018. Everyone was counting on continuation of positive trends, but the results at the level of those from the period before the last crisis started concerns about the near future of the housing market, in particular the risk of the housing transaction prices collapse.

In 2018, 212 596 new housing loans with a total value of PLN 53.852 billion were granted in Poland, which was more respectively by almost 12% and 21% in comparison to the previous year. This meant that the results of banks’ lending activity in the previous year were the best since 2011 in terms of number, while in terms of value it was the third result in history after the year 2007 and 2008.

According to declarations and signals coming from the developers’ sector, the primary market is stabilizing (read: decelerating). This was not jet confirmed by GUS data, which does not signal the reversal of the upward trend in housing investments for now. Although in relation to the previous quarter, the number of constructions started by developers decreased by almost 5% and the number of issued construction permits by 8%, but in relation year-to-year, both indicators showed an increase by over 30%. The results of the first three quarters of this year suggest that 2018 may be another record-breaking period in the construction activity of developers’ sector.

The housing market is heating up! In the first half of the year, the results of banks’ lending activity were the best for 7 years – almost 109 thousand new housing loans were granted. The value of new loan agreements granted in Q2 2018 – in the amount of almost PLN 14 billion – was the best quarterly result since 2010. The value of household debt in Poland due to granted housing loans for the first time exceeded the level of PLN 400 billion.

The average value of newly granted housing loans in domestic currency amounted to PLN 255 861, which was more by PLN 22 250 (9.52%) comparing to the value recorded in Q1 2018. Increasing value of granted housing loans was favoured by good macroeconomic situation in Poland together with increase in housing prices and growing demand for larger dwellings.

The image of safe and profitable investing in rental flats promoted in the media systematically heats the atmosphere on the housing investment market. Demand and prices were driven especially by investors looking for dwellings for short-term rental. On the other hand, accelerating the decision to invest in flats was caused by more rapid signals from the developers’ sector, pointing to three barriers that, if not significantly reduce the number of new investments, will certainly translate into a significant increase in dwelling prices in new investments, i.e. restrictions in access to new building plots, lack of employees in construction sector and increase in prices of building materials.

Keeping interest rates at historically low level led some people to withdraw savings from bank deposits and to invest in dwellings for rent, while others were encouraged to take out a mortgage loan for buying a flat. The effect could only be one – 2017 turned out to be a record-breaking year both on the housing market and mortgage loans market. In 2017, banks granted over 190 thousand housing loans for a total amount of PLN 44 billion, which meant the best result of the banking sector for six years. More than a year ago, there was no sign of such an increase in banks’ lending activity, but the results of the first quarter of 2017 have forced to increase the forecasted results. These forecasts were also exceeded.

Interest in the analysis of private rent market increased among the Report’s readers. Despite the significant supply of new flats for rent, a steady increase in rents was noted. I would like to recommend you the commentary by Artur Kaźmierczak, Co-Managing Partner of Mzuri Group.

The housing market has been recording systematic and sustainable growth for the last few years. Buying a dwelling as a capital investment appears now to be the safest form of investing money. It is affected by low interest rates and growing uncertainty and unpredictability of government and parliamentary activities in economic regulations, which have been exemplified by changes in rules of trade in land properties and changes in rules of wind farms construction and taxation. Fortunately, this growing demand for new flats is successfully met by developers. This is evidenced by slight  but constant increase in transaction prices on housing market, observed since the beginning of 2013. It is to be hoped that the ‘Flat Plus’ Programme promoted by government will not lead to disturbances on this market.

Increasing housing demand is met in a large extend with own funds of dwellings purchasers, but in spite of this, 2017 will be the best in terms of banks’ lending activity for the past six years. After the first two record-breaking quarters of 2017, a decrease in new granted loans was noted in Q3, both in terms of number and total value. However, the level of expected by AMRON Centre mortgage lending in 2017 will amount to over PLN 40 billion with the number of loans not exceeding 200 thousand of concluded agreements. Such a result will be possible due to the systematic increase of the average value of a granted housing loan to the level of PLN 238 956, which meant an increase in the last two years by over 26 thousand (i.e. over 12.6%).

These impressive results noted by developers and banks, proving the development of the housing market, should not, however, reassure those who are (should be) responsible for solving the housing problem in our country. Over 1.2 million apartments in Poland are not equipped with bathrooms and inhabitants of half a million of dwellings do not even have an access to the tap water – according to the data published several days before by the Central Statistical Office (as of 31 December 2016).

Solving the housing problem in Poland is a civilization challenge for all of us. I would like to invite you to a careful and reflective reading of the Report and active participation in discussions during the 14th Housing Finance Congress.

Jacek Furga,Ph.D.
Head of AMRON Centre

For the last few years housing market has been recording systematic and sustainable growth, which was confirmed also by the results of the second quarter of 2017. While interest rates are low, many people consider buying a dwelling as a capital investment, which brings measurable profits in a long term. On the other hand, there is also a large group of buyers, who changed their “first dwellings” purchased between 2005-2008 during property boom to larger ones in order to improve their current housing conditions. Negative interest rates decrease Poles’ propensity to invest the financial surpluses in banks and support investing in housing properties for rent, especially at such attractive and low cost housing loans. Suspension of accepting the applications for loans subsidised under the ‘Flat for Youth’ Programme did not affect either sales results or the number of new housing loans.

Number of housing loans granted in Q1 2017 exceeded 50 thousand, which meant an increase in lending activity by almost 20% in comparison to the previous quarter – such increase has not been observed on Polish market since mortgage boom in 2006 – 2008 and the following period of market reaction to subprime mortgage crisis in 2010. The developers’ sector also does not slow down. Developers are announcing another record-breaking year, in which regardless of banks’ clients applying for a loan for (another) new dwelling, more and more investors are able to finance flat purchases with cash.

In 2016, there were no major changes recorded on the housing market in Poland. Sale of dwellings, especially on primary market, remained at a high level and in the largest Polish cities prices confirmed clearly a slight upward trend ongoing since 2013. According to our forecasts, despite historically low interest rates, banks’ lending activity turned out to be weaker than in 2015. During the whole year 2016, 178 409 new housing loans of a total value of PLN 39.496 billion were granted, which meant a decrease by 1.61% in terms of volume and an increase by 0.45% in terms of value, comparing to the results recorded in 2015.

The results of banks’ lending activity in Q3 2016 confirmed opinion presented in previous editions of the Report that race of potential borrowers to benefit from funds of the ‘Flat for Youth’ Programme was the basic reason for the high lending results in the first two quarters of this year. When subsidies expired, the highest decline in number of loans (quarter to quarter) over last 5 years was recorded. Number of new loans granted in Q3 2016 declined by 13.20% in comparison to the previous quarter, while value of newly granted loans diminished by 8.78%. Despite that, the overall results of first three quarters of 2016 were slightly better than the results of the same period last year and therefore the repetition of last year’s lending results may be expected.

The end of ‘Flat for Youth’ Programme is approaching very fast. On March 15 this year, Bank Gospodarstwa Krajowego announced the suspension of accepting applications for funding the purchase of dwellings from funds budgeted for 2016 and on July 5 the process of accepting applications for subsidy from funds reserved for 2017 was suspend. A ‘race’ of potential borrowers to benefit from the government Programme, accompanied by strong emotions, was continued in the second quarter, this time for funds reserved for 2017. In combination with a seasonality effect typical for Polish residential market, it led to an increase in banks’ lending activity in the second quarter of 2016.

Emotions in the media, which in the first three months of this year accompanied a ‘race’ of potential borrowers to benefit from this year’s funds of the ‘Flat for Youth’ Programme, aroused high expectations towards lending results in the first quarter. Meanwhile, the free market behaved in its own way. The results of this year’s first quarter turned out to be significantly lower than the results of the fourth quarter of last year. Despite the high interest in ‘Flat for Youth’ Programme, a decrease both in number (by 8.15%) and value of new loans (by 10.85%) was recorded,  comparing to the previous quarter. This confirmed once again seasonality of the Polish residential market, according to which the results of the first quarter are the lowest in the whole year and lower than the results of the last quarter of the previous year.

Very good results in mortgage lending recoded in Q4 2015 translated to the results of the whole year, which turned out to be the best since 2012. Both the number (181 thousand) and the value (PLN 39.3 billion) of newly granted loans in 2015 were similar to results noted in the crisis year 2009 (respectively 189 thousand of loans for a total amount of PLN 38.7 billion). This represents an increase in value (by 6.78%) and in number (by 4.16%) of newly granted housing loans in comparison to number and value of loans granted in 2014. Polish market managed to return to so-called ‘organic’ ability to generate an annual volume of housing loans at the level of PLN 38-40 billion, with the number of 180-190 thousand, defined several years ago by Polish Banks Association.

For six years we have been quarterly providing you with update information on mortgage loans and housing transaction prices. In the period analysed in the following issues of the Report, i.e. since Q3 2009, banks in Poland granted 1 247 322 mortgage loans for the total value of PLN 261 billion. However, the number of active loans increased only by 600 thousand of loans and value of the total mortgage loans portfolio grew by PLN 166 billon. In the same time, 1 046 285 permits for housing construction were issued and 893 358 housing units were completed. Interest rate of a mortgage loan diminished from 7% to 3.5% and the decrease of the nominal housing transaction prices ranged from 2.48% (i.e. PLN 190 per square meter) in Warsaw to 8.83% (i.e. PLN 512 per square meter ) in Gdansk.

The results of Q2 2015 is a perfect example confirming the seasonality of banks’ lending activity, resulting from the seasonality of their customers’ activity in the residential investment market. After a very poor results of the first quarter, situation on housing loans market in the second quarter was characterized by growth unprecedented for several quarters. Banks granted 46 504 new housing loans for a total amount of PLN 10.058 billion. Comparing to Q1 2015 this means an increase of value of newly granted housing loans by 12.03%, and the number – by 10.28%. Partly this was an effect of continued very low PLN interest rates and attractively low transaction prices. There is also a new factor – the take-strength political campaign launched against banks and announcements imposing on banks new financial burden are seen as a threat to savings deposited in banks. According to information published by the National Bank of Poland, the accumulated amount of deposits in Polish banks decreased by more than PLN 5 billion in period from February to June 2015. These money supplemented by mortgage loans appeared on the real estate market.

Unfortunately, the latest results do not breach the downward trend in the scale of lending in the banking sector, which has lasted for over more than eight years now. In this case seasonality effect, occurring also in the previous years is significant. According to this effect, in each case the results of first quarter are lower  than the results of the last quarter of the previous year. Fortunately, this year’s decrease was negligible, less than 2%. Both, the number (42.2 thousand), and the value (PLN 8.9 billion) of newly granted loans in Q1 2015 can constitute good foundation for improvement in the future quarters. But can we count on this improvement?

Neither exceptionally low  PLN loan interest rates, nor attractive prices convinced buyers to take out long-term mortgage loans. Opportunity to purchase on the housing market – with low prices and the increasing range of dwellings – was used by those, who had cash or who withdrew their savings from bank deposits or other financial instruments and invested in dwellings earmarked for lease as  lease profitability definitely exceeded  payoffs offered by financial institutions.

The results of the last quarter of 2014 strengthened the downward trend observed since mid-2011, both in terms of the number of new loans, as well as their total value. Thus, as predicted by AMRON Centre – 2014 was the weakest year for the mortgage industry since 2005. Both the number (174 thousand) of granted loans in 2014, as well as their value (PLN 36.8 billion) were lower even than those obtained in the crisis year 2009 (189 thousand for a total amount of PLN 39 billion). Neither the extremely low interest rate of PLN loans, nor the attractive prices  did not convince buyers to take out the long-term mortgage loans. Opportunity to purchase on the housing market – with low prices and the growing range of dwellings in the primary market – was used in 2014 by those, who have had a cash or who withdrew their savings from bank deposits or other financial instruments and invested it in dwellings earmarked for lease. Profitability of the lease – especially in Warsaw – definitely exceeded refunds offered by financial institutions. Such situation was a reason for a great satisfaction of developers – sales results recorded in developers’ sector in 2014 were comparable to the results from the years before the crisis, which was in the considerable extend contributed to the government ‘Flat for Youth’ Programme. This optimism of developers resulted in an increase of new construction permits, as well as an increase in the number of new buildings. Slight, only by one percent, decrease concerned completed dwellings – their number in 2014 exceeded 143 thousand.

The analysis of banks’ lending activity in Q3 2014 shows that the summer months have brought a decline in both number and value of new granted loans. In comparison to Q2 2014, the value of new loans was lower by 3.61% and amounted to PLN 9.232 billion. Polish banks granted 43 653 new mortgage loans, which was 4.06% less than in the previous quarter. Lending activity was also lower comparing to the same period last year. From January to September 2014, banks have signed 131 thousand new agreements for a total value of PLN 27.6 billion. Comparing these results with the same period of 2013, the forecast result for 2014 can be estimated in a slightly higher level than in 2013, but lower than in 2012 – in terms of both number of mortgage loans (we forecast that the total volume of new loans will amount about 180 thousand) and the total portfolio’s value (i.e. about PLN 38 billion).

Unlike results of Q1 and Q2 2013, which were not congruent with the model of seasonal cyclicity, the numbers noted in Q2 2014 related to the results carried out by banking sector in the previous three quarters confirmed seasonal cyclicity of the phenomena occurring both on housing loans and – what is more obvious – also housing market. The results achieved in Q2 2014 are similar to the level of numbers noted in Q3 and Q4 2013. Although it is unclear whether significant increase both in number (about 8.48%) and value of mortgage loans (8.17%) granted in Q2 2014 comparing to Q1 2014 is a sign of a trend change or just a seasonal correction. A summary of the first half of this year shows that the year 2014 may bring slightly higher result of lending than 2013, but is still too early to speculate about any signal of recovery in this area.

Due to already confirmed seasonal cyclicity of both mortgage and – which is more obvious – housing market, analyses presented in the Report refer to numbers noted in Q1 2014 in relation to numbers noted in previous quarter (Q4 2013), as well as to those of respective period of previous year, i.e. Q1 2013. Unfortunately, even such an operation does not bring the positive conclusions in scope of mortgage lending. The only consolation is the fact, that the results recorded in Q1 2014 were better than the results of first quarter of… 2009! However, from the other hand, no one did actually expect the reverse of the downward trend that lasts continuously since half-year of 2011. Results noted in the analysed period, both in terms of volume (41.9 thousand) and value (PLN 8.8 billion), may be considered as a good basis for improvement in further quarters, all the more that on housing market there was observed the promising revival.

It was the weakest year for mortgage business since 2005. Both volume of loans granted in 2013 (176 thousand) and its value (PLN 36.5 billion) were lower than the volume and value of loans granted in the crisis year 2009 (respectively 189 thousand of loans of the total value of PLN 39 billion). Neither unusually low interest rates, nor attractive prices, which seemed to reach its minimal levels in most of locations, were not attractive enough to encourage potential purchasers to take out a long-term mortgage loan. Even such an incentive as amended Recommendation S, which limited loans with LtV ratio at the level of 100% after January 1, 2014, did not work out. Transactions on housing markets were concluded by those purchasers, who disposed cash or who withdrew savings from banks deposits or other financial instruments and invested it in real estate. It resulted with significant developers’ sales volume, comparable with results noted in record-breaking first quarter of 2007. At the same time, however, number of construction permits issued in 2013, as well as number of constructions started in 2013 were over 10% lower than in previous year, which seems to be a not quite good prognosis for the nearest future.

The third quarter of 2013 in terms of results of both volume (45.8 thousand of new loans) and value (PLN 9.5 billion) of newly granted loans, was already the second period recording the increase of both indicators. Unfortunately, even sustaining such speed of growth – on the level of c.a. 4% – in the following fourth quarter of 2013, does not change the fact that the most probable results of the year 2013 will turn out to be lower than those achieved in the worst as far as till now, the after-the-crisis year 2009.

Much more attractive information are given by the developers’ sector, according to whom there is a significant increase of housing units sale and significant reduction of earlier reserve of unsold housing units. There is also a growing number of housing transactions (both on the primary and secondary market) realized without banking loans – particularly in the most cheapest and most expensive housing units segments.

It is a great pleasure to share some good news with you for the first time since last five quarters. In fact, previous quarter’s mortgage results were the weakest for four years, both in terms of volume (41.6 thousand of new loans) and value (PLN 8.0 billion). It seems that the situation gets back to normality. There were  44 079 new housing loans of a total value of PLN 9.160 billion recorded in second quarter of 2013. The scale of such increase is however not enough significant to infer if it is a first sign of mortgage market recovery. Seasonal nature of the housing market was confirmed also on construction investments market, where an increase was recorded both in number of constructions started – by 31% and construction permits issued by 73% (both comparing quarter to quarter). At the same time, analysed quarter brought decreased (by 16%) number of completed housing units – total number of completed dwellings equalled to 31 367 units. Comparison of results of Q2 2013 and Q2 2012 prove the diminished supply on housing market.

Due to already confirmed seasonal cyclicity of both mortgage and – which is more obvious – housing market, analyses presented in the Report refer to numbers noted in Q1 2013 in relation to numbers noted in previous quarter (Q4 2012), as well as to those of respective period of previous year, i.e. Q1 2012. Conclusions, however, are not much optimistic – Q1 2013 results turned out to be better than the results of … Q1 2009. But from the other hand, no forecasts or predictions for last quarter did presume any recovery from the market slowdown observed constantly since half of 2011. Both number of new loans (41.6 thousand) and value (PLN 8.0 billion) were the lowest since last four years.

The year 2012 was not a typical year at housing market. Market players’ performance was determined by several changes in legal regulations, previously announced by the government and finally accepted by the Parliament. In purpose to omit the obligatory trust accounts enforced by the Act on protecting rights of housing unit or single-family house purchasers, which came into force on April 29, 2012, in first quarter of the year developers entered into market most of planned investments. According to Central Statistical Office, number of housing units completed in Q1 2012 increased by more than 32% comparing to the number noted in Q1 2011. As for the end of 2012, number of dwellings offered by developers on primary market amounted to over 54 thousands of units.

This period of last three years was a difficult time of test for Polish housing and mortgage markets in global crisis conditions. The results of that test are systematically recorded in successive issues of our Report, since the demand for reliable and dependable information is systematically growing. With a great satisfaction we observe the growing group of Report’s regular readers, including professional market participants and its observers, as well as potential investors from all European countries. Our response to increasing interest in trustworthy information on Polish market is AMRON-SARFiN Report available in English since the beginning of 2011 and since September 2011 – in extended version. Orders for specialist, individual reports, addressed  to AMRON Market Research and Analysis Division by developers and investors prove that AMRON’s reports are found solid and reliable. At the same time, we observe increasing interest in our reports on changes in average prices of housing units, construction plots and rural areas for particular locations, actualized on quarterly basis and available at AMRON Centre website. For housing units located in seven major Polish cities, property value estimation report enables to estimate a predictable value of a housing unit as for the estimation date.

Lending results for second quarter of 2012, both in terms of volume (49 620) and value of granted loans (PLN 10.044 Mio) are very serious signals alarming turbulences on housing finance market. It was the first time since several years, when  second quarter results turned out to be worse than results obtained at the beginning of the year. Such situation negate the regularity observed during few recent years, when results for second quarter were even 20-30% higher than those for first quarter. This time it is not as we might have expected. While the amount of loans granted in Q2 2012 is slightly higher than in previous quarter, the total value of newly granted loans was lower. Unfortunately, this downward tendency from quarter to quarter has been lasting for over a year.

Both volume (48 700 loan agreements) and the value (PLN 1.2 Mio) of newly granted loans in Q1 2012 proved to be lower than both in Q1 and Q4 2012. On top of that, as a result of exchange rates changes (EUR/PLN, CHF/PLN), total housing loans debt declined – for the first time in analysed period – to PLN 308 billion. The only mortgage lending indicator that reached it’s maximum was the average value of a housing loan, which exceeded the level of PLN 209 000. In new granted loans currency structure, the share of loans granted in PLN grew by 7% and it comes up to the level of 85% share in total portfolio, whilst the share of loans denominated in CHF has reduced to the level of 1% of newly granted loans.

Mortgage lending figures of the entire banking sector for fourth quarter of 2011 prove the decrease in both volume and value of granted loans (respectively by 13.02% and 15.54%).  However, the results of the whole 2011 were slightly better than those of 2010. The only lending indicator, which reached its maximum level in the history, was the average value of a mortgage loan granted in 2011 – it amounted to PLN 208 482. Currency structure of the new loan portfolio confirms the dominant share of PLN loans (up to the level of 78.58% in 2011). Within the denominated loans, volume of CHF loans had constantly decreased, contrariwise to EUR loans.

Banks’ lending figures for third quarter of 2011, both in terms of volume (59 571) and value (PLN 12.8 bln), confirm the decrease of over 4%, comparing to the records of the previous quarter. Basing on the current results, slightly weaker than expected, it is hard to anticipate whether banks and potential borrowers will try to avail the time before the full version of Recommendation S becomes binding and decide to take the postponed housing loan decisions.

Banks’ lending figures for second quarter of 2011, both in terms of number (62,197 credits) and value of granted loans (PLN 13.395 billion), represent an increase compared to the results of the first quarter, respectively by 9.33% as far as value and 8.02% as far as number is concerned. These  results signify the return to the lending level from the Q2 and Q3 of 2010. This was mostly the result  of systematically revised downwards of the banks’ loan margins and other fees concerned with mortgage lending policies. Another important factor of the lending growth was the ongoing discussion and parliamentary works on changing the conditions of the governmental “Family On Its Own” programme. The borrowers availed the last realizable chance to benefit from this programme in the second quarter of 2011, before implementation of new regulations.

Banks’ lending figures for Q1 2011, both in terms of number (57,578) and value of granted loans (PLN 12.252 billion), are comparable to the results of Q4 2010. However, while summarizing the results of last year’s Q4 I highlighted a surprisingly low result, a similar result in the first quarter of this year can be unambiguously assessed as a sign of returning prosperity on the loan market. Such mutually opposing assessments of the same result in consecutive quarters are justified by the cyclical nature of the Polish market related to the seasons of the year. Without further explanations on this issue, you are referred to charts exhibiting quarterly changes in the number and value of mortgage loans.