Archives: Raport Amron-SARFiN

A year ago, I forecasted that the real estate market in 2025 would stabilise. And that is exactly what happened. It was a good year. The business cycle that had been ongoing since 2015 was calmly ending. There were no shocks or disruptions, either external or internal. Housing market participants knew from the very beginning that the government was unlikely to launch a new subsidy programme for housing purchases. Step by step, the announcements and expectations of interest-rate cuts by the Monetary Policy Council were materialising.

An important factor for the housing and mortgage markets in 2025 was the gradual recovery of housing demand. Fortunately, despite six NBP interest-rate cuts – by 175 basis points over the year, to 4.00% – there was no sudden increase of demand. Stability on both housing and mortgage markets was supported by the long-term relation between rising incomes and growing housing prices, which helped to avoid market and social tensions. However, this increasingly attractive housing loan encouraged more than 232 thousand borrowers to meet their housing needs financed with a mortgage. The banking sector ended the year 2025 with a record-breaking lending result exceeding PLN 103 billion in housing loans granted. Such a high lending volume in 2025 reflects the systematically rising average value of a granted mortgage, reaching PLN 455.1 thousand at the end of 2025.

The good financial situation of new borrowers is reflected in shorter repayment periods of newly granted loans. The quality of the housing loan portfolio is also improving. The share of non-performing loans in the total housing-loan portfolio decreased to a record-low level of 1.34% at the end of 2025.

In Q4 2025, banks granted 64 228 housing loans with a total value exceeding PLN 29 billion, matching the results of the previous quarter. Year on year, however, these figures represent significant increases by 37% in the number of loans and by 47% in total value.

The total value of the active housing loan portfolio increased to over PLN 512 billion, despite a continued decline in the number of loans. At the end of 2025, the number of active housing loan agreements in Poland stood at 2 149 thousand – by 4.0% lower than a year earlier. Compared with the record level of the housing loan portfolio at the end of 2021, the number of active loan agreements decreased by nearly 400 thousand.

Observing changes in transaction prices over the last 4-5 quarters, one can note their stabilisation, with minor quarter-on-quarter changes, by 1 – 2%, up or down. In Q4 2025, in Wroclaw and Cracow slight declines of below 1.5% were recorded. Warsaw retained its status as the most expensive market, with an average price exceeding PLN 15 200 per sqm and a moderate increase by 1.5% compared to Q3 of the previous year. Meanwhile, Poznan, with the highest quarterly growth rate by 2.6%, appears to be catching up with other metropolises, driven by a dynamic labour market and limited availability of new land in attractive locations.

On an annual basis, Wroclaw was the only market where prices decreased (by 3.2%). In Cracow, prices returned to the level from a year earlier, while in the remaining cities increases were noted – the largest in Gdansk, by solid 3.5%.

Rental rates in Q4 2025 in Poland’s largest cities also remained stable. Quarter on quarter, in three of the seven largest cities (Gdansk, Cracow, Wroclaw) rents decreased slightly (most in Gdansk – by nearly 3%), while in another three (Poznan, Lodz and Warsaw) increases were symbolic, around 1%. The only market, where the average rent increased significantly, was Katowice, but even there the pace of growth (+2.3% in comparison Q3) can hardly be described as dynamic. Year on year, the highest increases were recorded in Poznan and Warsaw – 5.5% and 5.2%, respectively.

The year 2025 turned out to be better for developers than expected. Sales of more than 40.7 thousand flats across the seven most important developer markets in 2025 positively surprised. This result was by 9% higher than in 2024. Developers launched projects covering the construction of 44.8 thousand new flats. This surplus of new supply over sales translated into an offer growing for the second year in a row – in the last days of December 2025, the offer across the seven largest markets amounted to 62.1 thousand units.

Based on Statistics Poland (GUS) data, the pace of completing new dwellings above 200 thousand units per year has been maintained since 2019. In total, nearly 208.8 thousand dwellings were completed in 2025, i.e. by 4.3% more than a year earlier. Of this number, 134.1 thousand dwellings were intended for sale or rent (64.3%), 67.6 thousand dwellings were built by individual investors (32.4%), 4 299 dwellings were social rental housing (2.1%), 1 630 dwellings were municipal housing (0.8%), 931 cooperative dwellings (0.4%) and 165 company dwellings (0.1%) were also completed.

When summarising 2025, I cannot fail to mention the dynamic growth in the resources of the interbank real-estate market database – the AMRON III System. Last year, we made new functionalities, i.e. statistical and analytical reports, available to participants of AMRON III System, including an AVM report – automated property valuation. The new solutions were well received by banks. They are using the new reports, but, even more importantly, they have significantly strengthened the AMRON database supply with more than 367 thousand records. In total, AMRON III database resources increased in 2025 by more than 400.5 thousand new records and reached a level of more than 4.8 million data. In addition, in the Buildings Database maintained by the AMRON Centre, we collect ESG attributes (46 attributes) for every residential building across the entire country.

Recommendations for 2026

A significant increase in banks’ tax burdens in 2026 does not bode well for expectations that, together with further interest-rate cuts, the cost of a housing loans will continue to decline, as it did in the second half of 2025. Fortunately, this year we are likely to see at least one reduction in the NBP reference rate – if not two – which, combined with a stable pricing offer from developers and the observed downward correction in prices on the secondary market, should support balanced development in both housing loans and the developers’ sector. Interest rates at the end of 2026 are expected to be no higher than 3.5%, and the target rate of 3% in 2027 appears realistic.

Further development of the covered bond market, which has been evolving for over 25 years, should strengthen the system of long-term mortgage refinancing. The very successful debut of PKO BP Bank Hipoteczny S.A. on the Polish securities market – through the first post-war subscription of covered bonds addressed to individual investors – should be an appropriate inspiration for both regulators and other mortgage banks. I consistently recommend launching in Poland a state-supported system of long-term saving for housing purposes, including as a permanent element of building up a down payment for prospective borrowers.

Another topic worth recommending is the launch of REIT funds in Poland. After nearly two years of behind-closed-doors discussions, the third attempt over the last dozen or so years to introduce REITs in our country – or, as some prefer, FINNs – came to nothing.

In response to emerging ideas of introducing an additional or higher property tax for owners of rental flats, I believe the government should not undermine the only market mechanism that has efficiently supported residential construction in Poland since the economic transformation. If property taxes are to be discussed, they should be based on universal rules applicable to all property owners. After all, it would be sufficient to levy the tax on the value of the property rather than – as is today – on its floor area.

On this occasion, I would like to correct the information about the amount of property tax I pay on the house inhabited by my family in Zielony Ursynow in Warsaw. I owe this clarification to those attentive readers of the AMRON-SARFiN Report who did not hesitate to point out the mistake in my calculations. It is a pleasure to work for such engaged readers – thank you. I have already paid the property tax for 2026, so I will refer the rates applicable for the current year, i.e. PLN 0.77 groszy per sqm of the plot, on which our house is built, and PLN 1.25 per sqm of the house itself. The total tax paid – PLN 965.00 – represents approximately 6 per mille of the property’s estimated value.

In July 2025, the Act on Social and Municipal Housing was amended, establishing a new financial frameworks for the entire housing sector. The annual limit of expenditure on non-repayable grants for the construction of municipal and social housing was increased to PLN 5-6 billion. In the context of such a significant increase in budget expenditure on social housing, it is necessary to organise the rules for managing this housing stock. In particular, the option of privatising (purchasing) such dwellings should be excluded. A mechanism for the periodic verification of tenants’ incomes in the municipal and social housing stock should also be introduced, with rents adjusted accordingly – even up to market levels. Such a solution would help eliminate the currently informal, yet widely practised, procedure of ‘inheriting’ within a family the right to a social or municipal flat. An amendment to the Act on the Protection of Tenants is also essential in order to establish a balanced framework of rights and obligations for both tenants and landlords across all segments of the rental market. There should be no tolerance for tenants who do not pay rent or who deliberately damage the occupied premises.

The government’s fundamental challenge is to implement measures that strengthen the supply of new housing. In this regard, the key issue is unlocking developers’ access to land suitable for residential development that is currently owned by local authorities or state-owned companies. However, there is a risk that, amid the growing narrative of ‘revitalising the housing sector’ through renewed investment activity by housing cooperatives, most of the land available for residential development could become effectively reserved for cooperative projects.

The Deputy Minister of Finance and Economy emphasised that “Poland has 3.5 thousand cooperatives with the expertise to build, design and manage residential properties. We want to make use this potential. Our vision is to base the construction of the social housing segment precisely on housing cooperatives and TBSs, targeting those in the rent gap – too wealthy for municipal housing, too poor to buy at market prices.” In response to such an announcement, it is worth noting that in 2025 cooperative, municipal, social and company housing – 7 025 units in total – accounted for only 3.83% of all dwellings completed. Within this number, only 931 dwellings were completed by housing cooperatives. But we remain open to discussing effective solutions for the development of housing in Poland.

The year 2026 is likely to be a year of ‘normality’ on both housing and mortgage markets. Rising wages and the expected further reductions in NBP interest rates form the baseline scenario reflected in current forecasts. This should enable households to make further home purchases both to meet their own housing needs and for rental purposes. A stable and predictable legal environment, combined with moderate policy support, will be essential to sustain such activity. It will therefore also be a period of waiting for new impulses that could revive purchasing activity and affect the behaviour of investors and individual buyers.

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.

The systematic increase in the average value of a housing loan resulted in the total value of outstanding housing loans  at the level of over PLN 506 billion, despite the continued decline in number of such loans. At the end of the third quarter of 2025, the number of active housing loan agreements in Poland amounted to 2 163 thousand and was by 4.6% lower than a year earlier. Compared with the record level of the housing loan portfolio at the end of 2021, the number of active loan agreements decreased by more than 385 thousand.

The increased demand for housing loans is supported, in addition to the slowing growth of residential transaction prices, by a series of interest rate cuts. The first decision since October 2023 to cut interest rates by 0.50 pp, taken in May this year, followed by subsequent cuts in July and September, reduced the reference rate from 5.75% to 4.75%, which had a clear impact on the increase in creditworthiness. It was also visible in Housing Affordability Index monitored by AMRON Centre. This series of decisions by the Monetary Policy Council has also improved the consumer confidence indicators published by Statistics Poland (BWUK, WWUK), which were at their highest levels since the beginning of coronavirus pandemic.

Regular readers of the AMRON-SARFiN Report will certainly remember how, in the second decade of this century, we at AMRON Centre coined the term ‘organic level of lending activity’, resulting from our demographics, lifestyle, housing needs and financial capacity. Regardless of whether access to housing loans was supported by the government, approx. 180 thousand loans were granted annually. A decade ago, this translated into the annual volume of new mortgage loans of approximately PLN 40 billion, with the average loan amount at the level of PLN 200-220 thousand. For at least six years, we can assume that this organic level of lending activity has exceeded 200 thousand loans, with volumes reaching PLN 80-90 billion.

Housing loans taken out in the third quarter of 2025 were characterized by shorter repayment periods. The share of loans granted for 25 years or less increased, at the expense of loans with longer maturities (over 25 years), by nearly 3 pp, which was the result of a reduction in the cost of debt service due to NBP interest rate cuts.

The quality of the housing loan portfolio was also improving. The share of non-performing loans in the total housing loan portfolio decreased in the third quarter of 2025 to a record-low level of 1.42%, despite an increase by nearly 1 pp quarterly in the share of non-performing housing loans granted in CHF. This was the result of an improvement in the economic situation and stabilisation in the labour market.

When observing changes in transaction prices over the last 4-5 quarters, stabilization can be seen, with minor quarter-on-quarter fluctuations by 1-2%. In the third quarter of 2025, price increases were observed in those locations, which in the previous quarter had recorded declines. The housing market in Gdansk behaves somewhat differently, recording systematic increases which, on an annual basis, translated into the highest result among the monitored cities, at 6.7%. For comparison, the annual increase in the average transaction price in Warsaw amounted to 3.26%, reaching PLN 15 022 per square meter. Meanwhile, the average price in Wroclaw returned to the level from a year earlier and amounted to PLN 11 924.

Regional cities recorded slightly larger fluctuations, but changes in the average apartment price were single-digit both quarterly and yearly – mostly also below 5%.

Rent rates in the third quarter of 2025 in the largest Polish cities also remained stable. Quarter-on-quarter, slight decreases in average rents were recorded in three cities – Lodz, Katowice and Gdansk. In the remaining four analysed agglomerations, increases were observed, the highest of which was recorded in Warsaw – nearly by 2.5%. On an annual basis, rent increases did not exceed 5% – with the exception of Lodz, where the average apartment rent rose by almost 7% compared to the third quarter of 2024.

Despite a clear increase in banks’ lending activity, developers were cautious about starting new projects. The reason was a record stock of more than 60 thousand unsold apartments on the primary market. They therefore hold a stock of units sufficient for at least one and a half years of sales. It is true that in the third quarter, for the first time in a year, the number of building permits issued increased by as much as 24% compared to the previous quarter, but in annual terms it was still lower by 18%. The number of constructions started did not change. On the other hand, the number of dwellings completed by developers increased – over 33 thousand units meant an increase both quarter-on-quarter (by nearly 14%) and year-on-year (by 9%). However, this was the result of investment decisions made 2-3 years earlier.

This caution of developers may be the effect of new tax ideas that appear in public sphere, whether from the government or local authorities. Currently, developers, like owners of residential apartments and houses, pay property tax (unsold apartments) of PLN 1.19 per square meter annually. The Katowice local authority is preparing a new rate of PLN 34 per square meter (!). The Katowice local authority refers to a resolution of the Supreme Administrative Court (NSA) of October 21, 2024, in which the court held that companies, including developers, may pay lower taxes for units in purchased or constructed properties, but only on condition that they are intended to meet housing needs. The increase results from the classification of unsold apartments, so-called permanent vacancies, as goods which can be used as security for revenues from business revenues.

In the context of this idea of the local authorities in Katowice, I would like to refer to other tax proposals. In the commentary to the previous Report, I positively assessed the ideas of the Minister of Development and Technology, Tomasz Lewandowski, as defined in an interview given to Gazeta Wyborcza in August this year. I then had the opportunity for a direct conversation with the Minister on possible measures to support housing development in Poland. Relating to a significant increase in budget expenditure on social housing, it is necessary to restructure the rules for managing the stock of social housing units. Firstly, the possibility of privatization (purchase) of such units should be excluded. An obligation should be introduced to periodically verify the income of tenants in the municipal and social housing stock and to adjust the rent level accordingly, even up to the market level. Such a solution should eliminate the currently informal but widely practiced procedure of ‘inheriting’ within a family the right to a social or municipal flat. An amendment to the Act on the Protection of Tenants is necessary, which will finally introduce a balance of rights and obligations for both tenants and owners of rental housing, regardless of the market segment. There can be no tolerance for tenants, who do not pay rent or even devastate the occupied dwellings. It should be remembered that the cost of municipal housing or housing for rent below market prices is not limited to the cost of its construction and fit-out. It also includes the cost of monthly, long-term subsidies to the ‘preferential’ rent and the costs of maintaining this stock.

In response to the Minister’s question regarding the introduction of an additional property tax for owners of a second and subsequent apartment for rent, I stated that the government must not destroy the only market mechanism for the development of housing market in Poland that has been operating efficiently since the economic transformation. I do not wish to go back in my recollection further than the year of Poland’s accession to the European Union. In the period from 2004 to 2024, the banking sector granted more than 4.4 million housing loans for a total amount of over PLN 1 trillion, and thanks to this developers completed (and sold) 1.84 million apartments, while almost 1.5 million single-family houses were independently self-built by households. Therefore, if we want to talk about property tax, let us talk about general principles applicable to every property owner. After all, it would ‘suffice’ to introduce a tax on the property value rather than on its floor area. I am certainly aware that this is a challenge and achievable over many years.

Indeed, when I pay each year a property tax of PLN 0.73 per square meter of the plot on which our house stands, and PLN 1.19 per square meter of that house, I feel – as a conscious citizen, not to use the term ‘social activist’ – discomfort. The total cost of the tax in 2025 on my house and plot amounted to PLN 916, i.e. 0.6% of its estimated value. I am ready to pay more, with the awareness that these funds, paid into the local government budget, will improve local infrastructure and also will be allocated to municipal housing. Obviously without going overboard. I am, however, definitely opposed to the introduction of a dedicated ‘punitive’ tax on those, who fill the gap in state’s housing policy and finance housing units for rent. . To quote a line from one of the most popular contemporary Polish films: ‘let’s not tear off the hens’ golden eggs’. This is an efficiently functioning market mechanism for solving the housing problem in Poland, the only one that has been working since the beginning of the economic transformation, and it must not be ruined.

An excellent opportunity for a debate with the Minister and other outstanding experts in this field will be the forum of the 21st Real Estate Finance Congress, organized by the Polish Banks Association on November 20–21, 2025. We look forward to the opportunity for a substantive discussion. For our part, we propose to participate in the process of building long-term, systemic solutions to create a new market for housing loans. We propose solutions and financial instruments verified over the years which, in neighbouring countries, ensure incomparably more effective coverage of citizens’ housing needs.

We would like to congratulate the Management Board of PKO BP Mortgage Bank SA, thanks to which, after 250 years of their history on Polish soil, covered bonds have once again reached ordinary households. The first subscription of covered bonds in post-war Poland addressed to the individual investor has ended in tremendous success.

We are awaiting the government’s response to the proposal submitted by the Polish Banks Association to the Deputy Prime Minister and Minister for Digital Affairs, the Minister of Justice and the Minister of Development and Technology. Drawing on 20 years of experience in developing the interbank, nationwide real estate database – the AMRON System – we have offered the government cooperation in the implementation of the DOM Portal and, more importantly, a proposal for joint implementation of the Electronic Property Card project, the introduction of which would provide all participants in the real estate market with access to up-to-date, standardised, complete and reliable data on real estate.

I hope that the signing by the President of Poland of the Act abolishing fees for obtaining data on transaction prices from county Real Estate Price Registers, which constitute a source of revenue for local governments, will not have a negative impact on the efficient functioning of these registers. Access to data is one thing, and the ability to use information and interpret it correctly is another. It should be known what to look for and how to interpret the information obtained. I suggest relying on expert knowledge, more than twenty years of experience and algorithms based on millions of verified data points. Since the beginning of November this year, AMRON Centre has been offering the new RON Report, which determines the most probable transaction price for a property defined by the client (for the time being, residential units only). It is worth paying a few zlotys for such a product.

In total, the value of new housing loans granted in the first three quarters of 2025 amounted to more than PLN 74 billion, with a total number of over 168 thousand. We can therefore already today announce that 2025 will close with a record-breaking result of lending activity measured by the value of loans granted, exceeding PLN 100 billion. The banking sector’s best result for now was achieved in 2021, when 256 thousand loans were granted for a total amount of PLN 85.8 billion. Of course, in terms of the number of new loans, we cannot yet expect a record result this year, but there is a chance of a result higher than that achieved in 2019, when 225 thousand housing loans were granted.

Jacek Furga,Ph.D.
Head of AMRON Centre

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.

This systematic increase in the average value of new housing loans, despite a continued decline in their number, caused the total housing loans debt increased once again and, after four years, exceed the PLN 500 billion. At the end of Q2 2025, the number of active housing loans in Poland amounted to 2.176 million.

Higher demand for mortgages was driven by the slowdown in housing transaction price growth, rising wages, and the NBP’s interest rates cut on May 7, 2025. The first rate cut since October 2023, by 0.50 pp, lowered the reference rate from 5.75% to 5.25%, significantly boosting creditworthiness as reflected in the AMRON Centre’s Housing Availability Index. This predictable and long-awaited move by the Monetary Policy Council also improved consumer confidence indicators published by the Statistics Poland (BWUK, WWUK), which reached their highest levels since the start of the COVID-19 pandemic.

A significant increase in banks’ lending activity naturally led to a deterioration in two indicators of new loan portfolio quality. The share of loans with an LtV ratio above 80% rose slightly by 1.56 pp, reaching 28.25%. A worrying signal is also the extension of the maturity period for newly granted loans. Compared to the results noted in Q2 2024, the share of loans with maturities between 25 and 35 years increased by 4.5 pp.

Nevertheless, despite these warning signals regarding current lending activity, it is satisfying to note another decline in the share of non-performing loans in the total housing loan portfolio to 1.47%. This continues the downward trend observed since mid-2023. Although the quarterly change accounted for only 0.05 pp, the year-on-year decrease amounted to as much as one-quarter. At the same time, the share of non-performing CHF loans remained unchanged compared to the previous quarter (10.52% of the portfolio), but in comparison to the same period in 2024, a decrease of one-fifth was recorded.

During the analysed period, the slowdown in developers’ activity, observed since the beginning of the year, continued. Although in Q2 2025 developers completed over 29 thousand housing units, which was nearly 6% more than in the previous quarter and less than 1% in comparison to the same period last year, key indicators of current market condition showed significant declines. Developers started construction of nearly 32 thousand dwellings – less by 13% quarter-on-quarter and 18% year-on-year. At the same time, the number of construction permits issued, considered a reliable indicator of investment optimism, diminished to its lowest level in seven years, reaching 34 400 (by 17% less than in Q1 2025 and one-third less year-on-year).

At last, the long-awaited declines in average transaction prices have appeared on the housing market. Compared to Q1 2025, the average transaction price in Cracow dropped by as much as 2.73%, in Warsaw by 1.67%, and in Poznan by 1.27%. In other major cities, symbolic increases of less than 1% were recorded, with the exception of Gdansk, where prices rose by 1.18%.

On a year-on-year basis, all major markets recorded single-digit increases in the average transaction price per square meter of an apartment. The highest growth rates were recorded in Cracow (7.2%) and Gdansk (6.7%), while the lowest, just under 2%, was noted in Lodz. In Warsaw, the annual increase amounted to 3.36%, reaching PLN 14 757 per square meter. It is worth noting that just one quarter earlier, annual price growth rates in all monitored agglomerations exceeded 20%. This shows that the real estate market has also corrected the disruption caused by the ‘2% Safe Loan’ programme. In this context, the government’s clear stance on abandoning programmes that support potential homebuyers through loan subsidies deserves recognition.

In Q2 of this year, a predominance of rent increases was observed, with average quarterly growth between 1.5% and 2.5% was slightly higher compared to the previous quarter. However, on a year-on-year basis, rent increases did not exceed 5% with the exception of Gdansk and Lodz. The rental market in Lodz continued to lead with the highest annual increase in rents, reaching 8.48% in Q2 2025.

To summarize: after periods of high volatility in prices and rent rates, the market is stabilizing and becoming more accessible for buyers purchasing dwellings for their own needs, particularly as an alternative to renting. This trend is reinforced by the July decision of the Monetary Policy Council to cut NBP rates again, raising expectations of further reductions, which strengthens interest in real estate purchases supported by housing loan. The halt in price growth, and even visible corrections on some markets, combined with a diverse and relatively large supply, will support greater interest in residential purchases.

The total value of new housing loans in the first half of this year amounted to over PLN 45 billion, while the number amounted almost 104 thousand. This may signal a new record in lending volume. The banking sector’s best result so far was in 2021, when 256 thousand mortgages were granted for amount of PLN 85.8 billion. Of course, in terms of the number of loans granted, we cannot expect a record-breaking result this year, but it will certainly be significantly higher than a year ago, when nearly 203 thousand housing loans were issued.

The government reshuffle brought to light several promising government solutions for supporting the development of residential construction. Unfortunately, the proposed changes focus exclusively on supporting social housing, completely disregarding the aspirations of those ready to take on the effort of buying their own home with bank financing. Deputy Minister Tomasz Lewandowski, currently responsible for housing policy at the Ministry of Finance and Economy, recommended that those with the necessary resources and initiative should join housing cooperatives and pursue their housing plans “without bank margins and without developers.” As the Minister stated: “Such people should not be left on their own. They deserve state support.”

As the Polish Banks Association, we maintain our recommendation that state support should also extend to those willing to save long-term for housing purposes through building societies. This is a completely different group of citizens than those targeted by Minister Andrzej Domański’s Savings and Investment Account.

Meanwhile, on July 9, the Sejm amended the law on social and municipal housing, changing the financial framework for the entire housing sector and significantly increasing maximum spending limits on non-repayable grants through 2030 – covering up to 80% of construction costs in the municipal and social housing system. Subsidies are also proposed for preferential 30-year loans granted to Social Housing Associations (TBS), Social Housing Initiatives (SIM), and housing cooperatives.

In the context of such a significant increase in budget spending on the development of social housing, it’s necessary to organize the rules for managing social housing stock. First, privatization (purchase) of such apartments should be excluded. Periodic verification of tenants’ incomes in municipal and social housing should be introduced, with rents adjusted accordingly, even up to market levels. This should eliminate the currently informal but widespread practice of “inheriting” rights to social or municipal housing. An amendment to the Tenant Protection Act is necessary to finally balance the rights and obligations of both tenants and landlords, regardless of the market segment. There should be no tolerance for tenants who do not pay rent or even damage the premises they occupy. This is also an area for the social housing policy currently promoted by Deputy Minister Tomasz Lewandowski.

A new opening is also expected in the revival of housing cooperatives, which currently number 3 500 d enjoy a better public image than developers. The planned legislative changes are intended to, on one hand, “marketize” the management principles of housing cooperatives, and on the other, secure funding for cooperative housing projects. The draft changes include a non-repayable grant for cooperatives amounting to 15% for housing construction and a low-interest loan with a 2% annual rate and a repayment period extended to 50 years. This indeed could work.

Jacek Furga,Ph.D.
Head of AMRON Centre

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.

The decline in both the number and value of residential mortgage loan portfolio in the banking sector, observed since the end of 2021, continued. The number of active residential mortgage agreements in Poland at the end of Q1 2025 amounted to 2.192 million loans with a total value of PLN 494 billion. This meant a decrease in the number of active loans by over 14%, i.e. nominally by 356 thousand loans, compared to the end of the record-breaking year 2021 – still, more loans were being repaid than new ones were being taken out. The slowdown in the growth of transaction prices for apartments, rising wages, and the emerging public opinions of experts about expected NBP interest rate cuts (the first rate cut since October 2023, by 0.50 pp, was announced on May 7th this year and will undoubtedly help realize our last year’s forecasts regarding loan activity in 2025) all support decision-making regarding taking out a mortgage. All this contributes to an increase in creditworthiness, which was also visible in the chart of the Housing Availability Index monitored by the AMRON Centre.

A positive phenomenon was the continued decline in the share of loans with an LtV ratio above 80%. Their share decreased from a record high of 38.3% in Q1 2024 to 26.69%. This was a natural correction of changes caused by the combination of ‘2% Safe Loan’ programme with another product of the previous government – the government  guarantee for the borrower’s missing down payment. The borrower’s own contribution has played and should continue to play a significant role in assessing the creditworthiness of potential borrowers.

A worrying signal, as it indicates weaker financial standing of new borrowers, was the extension of the maturity period of newly granted loans. Compared to the results recorded in Q4 2024, the share of loans with a maturity up to 15 years decreased by 1.01 pp, and those with a maturity from 15 to 25 years – by 3.67 pp. At the same time, the share of mortgage loans granted for the period between 25 and 35 years increased by 4.66 pp. This should be noted especially in the context of the very high quality of the current portfolio of loans granted in PLN. As of the end of March 2025, the share of non-performing loans in the total portfolio of residential loans amounted to 1.52%, representing a decrease by 0.07 pp compared to the previous quarter and by 0.20 pp compared to a year ago. The quality of the foreign currency loan portfolio, especially those in CHF, has also improved significantly. The share of non-performing CHF loans at the end of the analysed quarter accounted for 11.51%, compared to 16.02% a year earlier.

The residential sector noted a slight slowdown in the first quarter of 2025. Developers, who spent 2024 rebuilding their residential offer, ended 2024 with a stock of 55 800 apartments in the seven largest markets. In some locations, this meant a stock of unsold apartments reaching up to three times the average quarterly sales. In addition, at the beginning of this year, there were over 74 thousand unique offers available on the secondary market in provincial cities. It was therefore not surprising that the number of building permits for apartments in the first quarter of this year decreased significantly, by over 20% year-on-year, and the number of constructions started was by 13% lower than a year ago. The number of dwellings completed by developers was by only 4.7% lower than a year ago, but almost 22% lower than in the previous quarter.

Increase in transaction prices per square meter clearly slowed down in the second half of 2024. Q1 2025 confirmed this trend, stabilizing the housing market situation. In Wroclaw, Gdansk and Poznan, even a slight correction in transaction prices were recorded, ranging from -0.51% to -1.01%. In the first three months of this year, the highest increase in the average transaction price per square meter of usable area was recorded in Cracow – to PLN 14 351/sqm., which meant an increase by 2.1%. In Warsaw, the average price increased to PLN 15 007/sqm., which was by 1.46% more compared to Q4 2024.

Compared to the same quarter of 2024, the largest price increases were recorded for dwellings in Cracow (16.53%) and Wroclaw (10.49%). Year-on-year price increases in Warsaw (7.30%), Poznan (6.92%), and Gdansk (5.84%) were at the level of quarterly increases recorded in 2023. The lowest price increase by 1.48%, recorded in Lodz, best reflects the atmosphere on the housing market.

Stabilization has also prevailed on the rental market. Increases in rent rates compared to the previous quarter were recorded only in Gdansk (1.71%) and Lodz (1.87%). In Cracow and Poznan, these increases were symbolic, and in Warsaw and Wroclaw, even declines in rent rates were recorded. Compared to the same period last year, increase in rent in Lodz by 7.08% was surprising, while the average increase in other locations amounted to 3-4%.

It has been over a year and a half since the government was formed by the new coalition. Unfortunately, during this time, there have been no systemic changes, ideas, or regulations to support the development of residential construction. Even in the ongoing presidential campaign, there is a lack of substantive proposals to improve the housing situation in Poland.

We are still waiting for a new draft law on REIT funds. Amending the Tenant Protection Act, introducing a balance of rights and obligations between landlords and tenants, would help supply the rental market with new units.

Without improving the housing situation, it will be difficult to stop the accelerating demographic crisis. One way is to increase the supply of housing in various segments. Currently, despite announcements of further reforms and programmes to support construction, there is no stable form of support in place. The announced ‘First Keys’ programme is controversial. Focusing aid exclusively on the secondary market is debatable, given that the construction market is not only about apartments, but the entire chain of related sectors: from material producers, through logistics, to local contractors.

In recent days, several ideas have emerged for organizing information about the real estate market. For now, however, the proposed actions appear inconsistent. Since autumn 2024, legislative work has been underway on a government bill for a portal with transaction prices. The ‘DOM Portal’ project is currently under review by the first committee of the Council of Ministers – the Committee for Digitization. At the same time, Deputy Minister of Development and Technology Tomasz Lewandowski announced the creation of the Central Register of Premises, a nationwide register of residential dwellings, both owner-occupied and rented. The Central Register of Premises would collect up-to-date data on apartments usage. On April 24, 2025, the Sejm passed a law requiring developers to create a website providing information on the prices of apartments offered for sale. In addition to an information prospectus and contact details, the website will be required to include the price per square meter of the apartment/house and associated premises (storage room, parking space, etc.).

Instead of seeking centralized solutions, we are moving towards further dispersal of information, imposing additional reporting obligations on market participants and generating the risk of inconsistency in the same information collected in so many places. Already today, real estate data are collected in many databases and registers, which makes their use and analysis difficult. One such register is the Central Register of Building Emissions (CEEB), which collects information, among others, on heat sources, buildings addresses and their owners. Transaction prices are collected in 380 county offices maintaining County Real Estate Price Registers and independently by, among others, the National Revenue Administration (KAS). Meanwhile, the Integrated Real Estate Information System (ZSIN), which has been under implementation since the late 1990s, will continue for another 10 years – the initial launch date of 2016 has been postponed to 2036.

Given the subsequent ideas for collecting data on the real estate market, the ZBP’s initiative to implement the Electronic Real Estate Card in Poland, already more than 10 years old, is gaining importance. It guarantees the consistency and reliability of information collected in these various records and registers. We are ready to discuss effective solutions for the development of housing in Poland.

Jacek Furga,Ph.D.
Head of AMRON Centre

Throughout 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.

In the first quarter of 2024, banks focused on finalizing mortgage applications under ‘2% Safe Loan’ programme submitted in 2023. These applications had a significant impact on the lending volume in the first quarter, with nearly 65 thousand mortgage agreements concluded. However, more encouraging was the stable and consistent lending volume in the following three quarters, after the market fully adjusted to the phasing out of ‘2% Safe Loan’. During this period, approximately 45 thousand mortgage loans were granted per quarter, resulting in an annual total of around 180 thousand loans. More than a decade ago, the AMRON Centre introduced the concept of the ‘organic level of mortgage lending’ in the Polish banking sector. Between 2012 and 2017, Polish banks consistently granted approx. 180 thousand new housing loans annually, regardless of government subsidies.

Ultimately, the banking sector closed 2024 with a very strong result, granting over 202 thousand loans of a total value exceeding PLN 85.1 billion. It was really close to surpassing the record-breaking volume of mortgage lending from 2021, when 256 thousand loans were granted amounting to PLN 85.8 billion in total. Regarding the number of loans granted, the result achieved by banks in 2024 can be considered highly satisfactory. These high lending volumes were driven by a systematic increase in the average mortgage loan value, which reached PLN 427 thousand by the end of 2024.

Despite the increase in the number of mortgages granted in 2024, the downward trend in the total number of active mortgage loans, observed since late 2021, could not be reversed. The number of active housing loan agreements in Poland at the end of 2024 amounted to 2.240 million, while the overall mortgage debt amounted to PLN 495 billion. This meant a decline in the number of active loans by over 12%, or nominally by 308 thousand loans, compared to the peak recorded at the end of 2021. In other words, more mortgages continue to be repaid than new ones were granted.

Developers also had no reason to complain in 2024. Although, according to JLL, they sold 39 600 apartments in Poland’s six largest metropolitan areas in the past year, compared to 57 600 in the heated market of 2023. This represents decrease by 31% in annual sales on major markets. Despite this, developers’ activity did not decline. In 2024, developers started construction of over 152 thousand new apartments, marking an increase by 33% compared to the previous year. At the same time, they completed only 124 thousand apartments, which was by 9% less than in 2023, and the number of obtained construction permits reached 205 thousand, what meant an increase by 27%.

In 2024, developers were rebuilding their offer. At the end of 2024, 55 800 apartments were available on the primary market on Poland’s seven largest markets, which was over 20 thousand more compared to the previous year. The supply on the secondary market looks equally attractive. According to Unirepo data, in mid-January 2025, over 74 thousand unique offers were available in provincial cities – one-third more than a year earlier.

Regarding developers’ offers, it is worth noting the announcement by the Minister of Funds and Regional Policy, Katarzyna Pełczyńska-Nałęcz, about preparing a parliamentary draft bill forcing developers to publish their prices.

Meanwhile, at the Ministry of Development and Technology, 2024 was marked, among other things, by work on the construction of the Housing Transaction Data Portal (Portal DOM). In connection with this project, the Polish Banks Association submitted a proposal to use the banking sector’s experience in creating a nationwide real estate database, including the potential use of certain functionalities of the AMRON System. We are convinced that using our over 20 years of experience in this project, as well as the resources and functionalities of the AMRON System, could significantly accelerate the implementation of the Portal DOM while reducing the associated public expenditure.

Growth dynamics of transactional prices per square meter of apartments significantly slowed down in the second half of 2024. While in the third quarter of 2023, quarterly price increases in Poland’s six largest cities ranged from 7.91% to 9.32%, a year later they were at the level from 1.89% to 3.01%. However, on an annual basis, price growth remained high due to the impact of the ‘2% Safe Loan’ programme launched in mid-2023. In the fourth quarter of 2024, average price in Cracow increased by 19.46%, in Wroclaw – by 14.92%, and in Poznan – by 13.82%. In Warsaw, the increase amounted to ‘only’ 11.62%, while in Gdansk – 11.32%.

In 2024, housing buyers expanded their purchasing activities beyond the largest cities to smaller regional markets, where low supply led to higher annual price increases than in major metropolitan areas: 15.92% in Rzeszów, 14.88% in Kielce, 14.76% in Opole, 14.13% in Sosnowiec, 14.93% in Torun, and 14.32% in Gorzow Wielkopolski. These markets were gaining popularity due to relatively lower prices, improving infrastructure and growing employment opportunities. Once considered marginal, these locations were becoming attractive investment destinations, especially in the rental segment.

Meanwhile, annual rent rate increases at the end of 2024 were symbolic in some markets. In Gdansk and Cracow, rent rates increased by 0.7%, while in Wroclaw a slight decrease by 0.34% was noted. In Warsaw, the average rent increased by 2.52%, while the highest growth was recorded in Lodz (+5.60%) and Katowice (+4.35%).

Recommended actions for 2025

The first year of the new government coalition has unfortunately not brought any noticeable changes, ideas or regulations in the area of supporting the development of housing construction. Two weeks ago, on February 13, 2025, we learned the assumptions of the new housing programme presented by the Minister of Development and Technology, but the provided information was very general and the Minister himself noted that it may undergo far-reaching changes during the legislative process. However, the presentation of these assumptions has sparked considerable debate. Initial statements from representatives of the Ministry of Development and Technology indicate that developers will be excluded from the programme’s provisions. Loan subsidy will only be available for purchasers of apartments on the secondary market, while price limits will exclude properties in the largest cities. Moreover, only those who have not previously owned an apartment will be eligible for mortgage subsidies, meaning that large families will be excluded from support. The ‘Housing Key’ programme, if implemented, will not take effect until the end of this year (currently projected for October 2025). The announcement of such a preliminary concept appears to be primarily an element of the election campaign aimed at demonstrating the government’s initiative, though its real effectiveness remains uncertain. Polish Banks Association will certainly fully engage in the consultation process regarding the specific instruments of this programme.

In the meantime, I will once again recommend actions that I have repeatedly mentioned in various publications and conference presentations.

The primary challenge for the government is to take steps to strengthen the supply of new housing, and a key issue in this matter is to unlock developers’ access to land suitable for residential construction, currently owned by local governments or state-owned companies. I hope that the recent changes in the management of the National Property Resource (KZN) will facilitate this process.

An amendment to the Tenant Protection Act, introducing a balance of rights and obligations between landlords and tenants, would help increase the supply of rental housing units. It is unacceptable that a tenant who does not pay rent or even damages the apartment is literally impossible to evict. This is one of the major barriers to the development of private rental housing.

The Housing Savings Account, introduced alongside the ‘2% Safe Loan’ programme, was a step in the right direction toward building savings. However, the fact that only 5 thousand accounts have been opened over a year and a half showed that it failed to attract savers for housing purposes. In contrast, millions of citizens in neighbouring countries participate in the savings and building societies proposed by the Polish Banks Association, which has the necessary expertise in this area.

At the same time, the mortgage bond market, which has been developing for over 25 years, should be furtherly strengthened. The increase in the number and volume of mortgage bonds in 2024 confirms the positive impact of the long-term funding ratio introduced by the Polish Financial Supervision Authority.

Another crucial issue is defining the target model for mortgage lending in Poland. Following the example of other EU countries, we should consistently work toward fixed-rate mortgage loans. I am personally convinced of this. Within the Employers’ Housing Forum, in which the Polish Banks Association has participated for over two years, a proposal for a fixed-rate mortgage loan at 5% for the entire loan term has been developed, supported by a mechanism, in which the public sector (NBP or BGK) provides appropriate interest rate swap transactions.

The recommendation-worthy initiative is also the launch of REIT funds in Poland. Confidential negotiations regarding the future law have been ongoing in ministerial offices for over a year, but this topic has been discussed for many years. It is time for decisions! REITs could generate a stable funding stream for residential investments, including stimulating the construction of rental housing.

The topic of rental housing, both in the commercial and social sectors, with the participation of private investors, PRS funds, as well as TBS and municipal housing, deserves a separate publication. It is encouraging that the ‘Housing Key’ programme includes support for social housing development within social housing associations (TBS), social housing initiatives (SIM) or housing cooperatives (SM). However, these funds should not be used to cover tenants’ participation fees!

A particularly important aspect that needs attention is education as part of housing policy. Although the Year of Economic Education has passed, broad consumer education is still essential. This includes informing people about different ways to meet housing needs, mortgage loans principles and phenomena occurring on the housing market. This is necessary given the persistent disinformation spread by various media, which repeatedly claim an impending housing bubble, a market collapse or accuse banks and developers of excessive profiteering at the expense of homebuyers.

The key educational objective should be to make young people aware that owning an apartment is not a prerequisite for normal functioning in society and that renting is not synonymous with failure. However, such education must be accompanied by development of a sufficient supply of rental housing.

Another crucial educational area is raising awareness among customers about the benefits and importance of sustainable construction and energy-efficient investments. It is important to prove that energy-efficient solutions lead to long-term savings in apartment maintenance costs.

A fundamental issue – not only for the banking sector – is reversing the growing trend of government institutions undermining long-term agreements between consumers and banks. This constitutes the greatest threat to the stability of Poland’s financial system. It is the government’s responsibility to stop this process.

Residential construction can and should be used, as in other countries, as one of the most effective economic growth engines. The government should therefore support both demand and supply on the housing market. We can certainly afford a higher level of budget spendings in this area – it simply makes economic sense. It is already well-documented that as much as 37% of the price paid to a developer for an apartment goes to the state budget in the form of various fees and taxes. This raises an obvious question: why not implement a simple, transparent and attractive tax relief for those investing in rental properties?

We are ready to discuss effective solutions for the development of housing in Poland. Everything has already been invented – it is just a matter of knowing how to combine these ideas into a long-term housing programme rather than starting by handing out money, especially to those who do not need it.

The year 2025 will be a year of ‘normality’ on the housing and mortgage markets. Rising wages and expected interest rate cuts by the National Bank of Poland are the future outlined by current forecasts. This means that Poles will be able to afford further housing purchases, both to meet their own housing needs and for rental purposes. We need a stable legal environment and some encouragement and approval for such actions. It will also be a time of waiting for new stimuli that could revive purchasing activity and influence investors’ and individual buyers’ actions.

Jacek Furga,Ph.D.
Head of AMRON Centre

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. Regular readers of the AMRON-SARFiN Report may remember the concept of the ‘organic level of banks’ lending activity’, which we coined at the AMRON Centre in the second decade of this century. This level, resulting from demographics, lifestyle and financial capacity, consistently generated about 180 thousand loans annually, regardless of government support programmes. A decade ago, this number translated into an annual value of new mortgage loans of PLN 40 billion. Meanwhile, only in the third quarter of 2024, banks granted new housing loans for the amount of almost PLN 20 billion. Similar to the number of loans, this matches the result of the previous quarter. Interestingly, this result was by almost 22% better than a year ago, when ‘2% Safe Loan’ programme was introduced. So there is no reason to complain or proclaim a crisis on the housing or mortgage market.

Moreover, we are currently observing a reversal of the trend of shrinking active housing loans portfolio. The decline in the number of active housing loan agreements in the third quarter of this year amounted to only 0.54% (to the level of 2.267 million). Regarding the value of Polish households debt due to granted housing loans, a slight increase (similarly to the previous quarter) by 1%, i.e.  to the amount of PLN 493.210 billion, was noted. This reflects a clear slowdown in early repayments of loans granted in previous years, with a systematic increase in the average value of a new housing loan, which reached PLN  421,695 in the third quarter of 2024. This meant an increase in one year by 8.69% (nominally by over PLN 33.7 thousand). It was the result of rising prices, but also – importantly – the higher creditworthiness of borrowers.

Several factors supported decisions to take out housing loans: reports of the President of National Bank of Poland on the reversal of the upward trend in inflation, a slight decline in average interest rates for new housing loans, and noticeable easing of creditworthiness criteria by some banks for household borrowers. Additionally, stabilizing housing prices and wider offer of properties encouraged decisions to buy a flat. The Housing Affordability Index (HAI M3) has also remained stable for nearly two years.

The quality of the housing loans portfolio also improved – non-performing loans accounted for 1.69% of the total housing loan portfolio, which was one quarter less than a year ago. The share of non-performing CHF loans has also decreased significantly, driven by accelerated settlements between banks and CHF borrowers.

We forecast that this year banks in Poland will grant at least 200 thousand new housing loans with a total value exceeding PLN 84 billion. And even a record result of PLN 85.8 billion from 2021 is possible to achieve.

The normalization of the housing loan market positively impacts the residential construction sector, as suggested by Statistics Poland (GUS) data. The number of building permits issued in the third quarter of 2024 by developers amounted to 52,258, i.e. by 27.34% more compared to the third quarter of 2023. At the same time, they completed 30,946 units, which was by 4.71% less than in the previous year, but the number of started construction increased by 12.84% (it was 36,382 units). This propensity to initiate new projects was also enhanced by stable construction costs. Building material prices slightly diminished, while labour costs remained under pressure of overall wage growth. Nevertheless, the growth rate of construction costs has significantly slowed in recent quarters.

Transaction prices of dwellings in the largest Polish cities were still increasing, although quarterly growth rates were much lower in most locations than in previous quarters. In the third quarter of 2024, Cracow recorded the most significant price increase by 5.04%. Average transaction prices increased by 3.01% in Poznan, by approximately 2.5% in Gdansk and Wroclaw, and by only 1.89% in Warsaw compared to the second quarter of 2024. A slight price decline, by only 0.45%, was noted in Lodz. Some housing market analysts predict future decrease in house prices. For now, however, the declines were noted only in offer prices.

Year-on-year price increases, driven by the launch of ‘2% Safe Loan’ programme in the third quarter of 2023, reached 20% in Cracow, Wroclaw, and Poznan. In other major cities, double-digit annual price increases were also recorded, but at the level of 11-12%. Surprisingly, smaller cities experienced higher quarterly and annual price growth rates than larger agglomerations.

Meanwhile, residential rents increases in the third quarter of 2024 were slightly higher than in the previous quarter, likely due to seasonal effects related to the new academic year. In Warsaw, the average rent reached PLN 2,301, which meant quarterly increase by 2.59%, but only by 1.32% in comparison to the third quarter of 2023.

The Polish Banks Association actively participates in debates and consultations to develop proposals and recommendations for enhancing the efficiency of Poland’s banking sector, to the benefit the national economy, including financing solutions for residential construction market on both the demand and supply sides. We see an opportunity to implement systemic and responsible actions in this area, grounded in coalition agreement provisions. A critical issue, not only for the banking sector, is reversing the narrative of undermining long-term agreements between consumers and banks – a threat to the stability of Poland’s financial system. It is the government’s responsibility to stop this trend. We propose contributing to the development of long-term systemic solutions for creating a new housing loan market, leveraging proven financial instruments and solutions that effectively address housing needs in neighbouring countries. Unfortunately, despite a year under the current government, no significant proposals or actions in this area have emerged. In September, the attention of the entire government, and in particular the ministries responsible for construction and infrastructure, was focused on the areas of southwestern Poland affected by the catastrophic flood, but this does not justify the stagnation in this area.

Jacek Furga,Ph.D.
Head of AMRON Centre

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. Especially now, with no need to rush, buyers can make more advised choices while hoping for a rate cut by the Monetary Policy Council within the next two to three quarters. A normally functioning housing market typically reacts to economic stimuli with a few quarters’ delay. The behaviours of market participants are usually the result of consumer or investment decisions made at least six months earlier. That’s roughly how long it takes for buyers to decide, secure financing, choose a property, and finalize the transaction. Unfortunately, the ‘2% Safe Loan’ programme introduced significant disruption. There was no time for thoughtful decision-making, especially when it came to choosing that perfect property. The main consequence of this disruption was a significant increase in housing transaction prices.

A decline in banks’ lending activity in the second quarter of 2024 was, therefore, expected compared to both the first quarter of 2024 and the last quarter of 2023. However, it is worth mentioning that both the number and value of loans granted from April to June this year exceeded the results of the third quarter of 2023, when the ‘2% Safe Loan’ programme was launched.

The 45 434 mortgage agreements concluded in the second quarter of this year were by 29.56% lower than in the first quarter of 2024, but by 47.52% higher than in the corresponding period of 2023, with an increase in their value by as much as 69.19%. The total value of mortgages granted in the second quarter of this year amounted to PLN 19.118 billion.

We are slowly approaching a reversal of the trend of shrinking active housing loans portfolio. The decline in the number of active mortgage agreements to the level of 2.279 million amounted to only 0.5% in the second quarter. However, the trend has already reversed in terms of total value of active mortgage loans. For the first time since the beginning of 2022, total mortgage debt increased slightly by 0.89% to PLN 488.306 billion. This clearly meant a weakening of the early repayment trend of loans granted in previous years, with a systematic increase in the average value of a housing loan, which in Q2 2024 reached PLN 423 336. Year-on-year, an increase by 15.62% was noted (nominally by over PLN 57 thousand). This was the result of rising prices as well as improved creditworthiness of borrowers.

The return of the housing loans market to normality was also evidenced by the fact that after six quarters of constant, dynamic increase in the share of new housing loans with LtV ratio above 80%, there was a significant decline in the number of such loans from 38.3% in the previous quarter to 26.61% in analysed period. This increase in borrowers’ own contribution also confirmed the improvement in creditworthiness of new borrowers.

The value of new housing loans in the first half of this year amounted to almost PLN 46 billion, with a total number of 110 thousand loan agreements. This supports our forecast presented when summarizing the first quarter of this year, that even without another government programme like the #forStart Loan, a result of over 180 thousand loans with a total value exceeding PLN 80 billion is possible to achieve in 2024. Of course, if the government confirmed in a month or two that another loan stimulus will be launched in early 2025, some potential borrowers might postpone the decision to buy real estate this year, which could significantly reduce demand for mortgage loans, especially in the last quarter of this year.

Another indicator of the solid financial standing of new borrowers is the shortening of the maturity period for newly granted loans. In comparison to the results noted in the first quarter of 2024, the share of loans with a maturity between 25 and 35 years decreased by 2.71 pp.

The quality of mortgage portfolio also improved. In the second quarter of 2024, the share of non-performing housing loans in the mortgage portfolio accounted for 1.92%,  which meant a decrease by 0.22 pp in comparison to the previous quarter. At the end of June 2024, the share of PLN housing loans with default on payments accounted for 1.44%, i.e. less by 0.03 pp. The share of non-performing loans in CHF amounted to 14.02% of the portfolio and therefore decreased by 2.00 pp comparing to the previous quarter.

According to the latest data published by Statistics Poland, the housing construction sector has been experiencing a revival for over a year. Moreover, this was a very dynamic revival, with developers’ willingness to start new projects increasing by more than half. From July 2023 to June 2024, developers started construction of over 147 thousand new apartments, which was over 60% more than if we had done a similar summary a year earlier. In the first half of 2024, developers completed 58 502 apartments, which was by 9.61% less than in the same period last year. However, the number of constructions starts was by 68.05% higher (80 591 apartments), and the number of dwellings with construction permits obtained by developers amounted to 101 204, i.e. by 37.20% more than in the first half of 2023. Stabilizing construction costs may also influence the increased willingness to start new projects. The prices of building materials were stabilizing more favourably, although labour costs remained under pressure from overall wage growth. Nevertheless, the growth rate of construction costs has slowed several times over the past few quarters.

Transaction prices of dwellings in the largest Polish cities were still increasing, although quarterly growth rates were much lower in most locations than in previous quarters. In the second quarter of 2024, significant price increases were recorded in Wroclaw (6.55%) and Cracow (5.71%). The average transaction price in Poznan increased by 3.04%, and in Warsaw by only 2.08% in comparison to the first quarter of 2024. In other analysed cities, price increases did not exceed 1%. Some housing market analysts even predict a coming decrease in housing prices, but so far, price reductions were limited to offer prices.

The annual price growth triggered by the launch of ‘Safe Loan 2%’ programme in the second half of 2023 reached 20% across all cities, with Cracow, Wroclaw, and Poznan seeing nearly a 28% increase in housing prices.

On the other hand, rent rates increases in the second quarter were minimal, ranging from 1% to 1.5%, and in Wroclaw even a decline by 1.76% was recorded. The average rent rate for an apartment in Warsaw amounted to PLN 2 243, i.e. by 0.76% more than in the previous quarter.

Regarding prices, I would like to highlight the ongoing work at the Ministry of Economic Development and Technology on the Housing Transaction Data Portal (‘DOM Portal’). The banking sector has critically evaluated the real estate information market since the beginning of Poland’s economic transformation. That is why, the Polish Banks Association decided to create an interbank, nationwide real estate database over 20 years ago. At the beginning of August this year, the Polish Banks Association presented to the Minister of Economic Development and Technology a proposal to utilize the banking sector’s experience in creating a nationwide real estate database and even to use some functionalities of AMRON System in the work on ‘DOM Portal’. We are convinced that using our experience in this project, as well as the resources and functionalities of AMRON System, can significantly speed up the work on creating ‘DOM Portal’ while reducing budget expenditures for this purpose. The real estate data collected in AMRON database corresponds to 99% of the scope of data expected to be collected and processed by ‘DOM Portal’. AMRON database exceeds 4.2 million records. The National Bank of Poland, the Polish Financial Supervision Authority, the National Prosecutor’s Office and the Police, as well as over 600 business entities active on the real estate market, including the 25 largest commercial banks and 391 cooperative banks, have been using the AMRON System for many years.

We have presented the Minister with a proposal to meet the government’s information and reporting needs on the real estate market, as well as to provide consumers with reliable information on residential transaction prices using the AMRON System’s resources and functionalities.

Building the database infrastructure is a relatively minor issue. The real challenge is obtaining complete, standardized, and reliable data describing the real estate transactions, particularly data that details the features and parameters of properties. The very low quality and minimal description of properties in notarial deeds of sale is the problem. Therefore, we have submitted a proposal to Deputy Prime Minister Krzysztof Gawkowski and to the Minister of Justice to implement a unique initiative to organize and digitize the real estate information market by introducing the Electronic Property Card (EPC) into the legal order and common use. The adoption of Polish Banks Association proposal would be a breakthrough in organizing the real estate information market. It would contribute to digitization of Polish administration and economic transactions, increase transparency if real estate market and minimize opportunities for abuse in this area. Additionally, it would ensure standardization and unification of property information across various public and industry registers, eliminate transcription errors and delays in transaction registration, which are currently caused by the manual entry of the same data into multiple or even dozens of registers by the staff of institutions maintaining these registers – with updates occurring in real time. Additionally, it will standardize and unify the scope of property information across various public and industry registers, eliminate clerical errors, and remove delays in transaction registration, caused by today’s practice of rewriting the same data into several or even dozens registers by employees of institutions maintaining these registers. Updates would take place in real time.

Returning to the housing and mortgage market, we maintain our earlier forecast of banks’ lending activity in 2024. However, how the housing loans market will look like in the second half of 2024 largely depends on whether and when the government provides clear confirmation about the feasibility of launching a new borrower support programme at the beginning of 2025. Another key factor will be whether growing expectations for lower interest rates, particularly in the U.S., in response to the risk of global recession are met, and if this will be followed by other countries, including Poland. These expectations are already influencing interest rate futures contracts, not just in the U.S. but also in Poland.

Regardless of the future of #forStart loans, we hope to initiate discussions on long-term systemic solutions that go beyond a single government term, because the Polish housing market needs a coherent, comprehensive and – most importantly – long-term housing programme. The 20th jubilee edition of the Housing Finance Congress, organized by Polish Banks Association on October 24-25, 2024, will be an opportunity for discussion, also with government representatives. We look forward to a constructive dialogue.

Jacek Furga,Ph.D.
Head of AMRON Centre

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 loans amounted to PLN 26.876 billion, which means a decrease of 4.52% compared to the previous quarter.

Certainly, compared to the same period in 2023, the results of the first quarter showed an impressive increase of 193.63% in the number of loans granted and almost 260% in the value of newly granted loans.

The decision to take out a mortgage loan is facilitated by the psychological acclimatization to a high but stable level of inflation and interest rates, especially in the context of expert opinions appearing in the public sphere about expected reductions in NBP interest rates. Even if this reduction is expected over quarters rather than months. The increase in wages is also significant. All of this contributes to the growth of creditworthiness, as seen in the AMRON Centre’s Housing Availability Index.

The portfolio of active loan agreements continues to shrink, meaning that the number of fully repaid loans still exceeds the number of newly granted loans. From January 1, 2022, the number of active mortgage loan agreements in Polish banks decreased by over 257 000 to 2 291 000, and the value of the mortgage portfolio decreased by over PLN 27 billion to PLN 484 billion. However, at the same time, the average value of a mortgage loan in the first quarter of 2024 reached the level of PLN 417 385, which means an increase by 23% (nominally almost PLN 78 000) over the year. This is due to rising prices and higher creditworthiness of borrowers.

A worrying phenomenon is that in the first quarter of 2024, for the sixth consecutive time, we observe an increase in share of loans with an LTV ratio above 80%. Their share more than doubled from 17% in 2022 to 38.30% in Q1, 2024. This is an obvious result of another product from the previous government – the government guarantee for the missing down payment. However, this is also one of the signals of the deterioration of the mortgage loan market. The borrower’s down payment has played and should continue to play an important role in assessing the potential borrower’s creditworthiness.

Another worrying sign, indicating the weaker financial condition of new borrowers, is the lenghtening of the maturity period of newly granted loans. Compared to the results recorded in the fourth quarter of 2023, the share of loans with a maturity period up to 15 years decreased by 4.16 percentage points. At the same time, the share of loans with a maturity period between 25 and 35 years increased by 4.17 percentage points.

This should be particularly noted in the context of very high quality of current PLN loans portfolio. As of the end of March 2024, share of non-performing loans in the total mortgage loan portfolio was 2.14%, i.e. lower by 0.07 percentage points from the previous quarter and by 0.15 percentage points from a year ago. The situation is different for the portfolio of foreign currency loans, especially those in CHF. The share of non-performing loans in Swiss francs at the end of the studied quarter was as high as 16.02% of the portfolio, up by 3.65 percentage points from the previous quarter and by 7.44 percentage points from a year ago. This is not a result of the poor financial condition of Swiss franc borrowers, but their deliberate cessation of servicing CHF loans in connection with entering into a legal dispute with the bank. The total number of lawsuits in CHF cases has already exceeded 160 000.

The housing sector is characterized by further growth in investor activity. Although the number of completed dwellings decreased by 17.68%, this decline should be attributed primarily to seasonal factors. The number of newly started housing constructions increased by 19.66% to 60 078, while the pool of dwellings for which building permits were issued increased by 3.27% compared to the fourth quarter of 2023. Compared to the previous year, these increases were much higher, amounting to 55.75% for newly started constructions and 32.83% for building permits issued.

The first quarter of 2024 brought further increases in housing prices in all analysed cities. The highest increase in the average transaction price per square meter of usable residential area was recorded in Warsaw – to the level of PLN 13 986/sqm., an increase of 5.54% compared to the value recorded in the fourth quarter of 2023. The lowest price dynamics were recorded in Wroclaw – an increase of 3.48% to the level of PLN 10 943/sqm.

Compared to the same quarter of 2023, the highest price increases were recorded in Poznan (21.76%), Wroclaw (20.57%), Cracow (20.49%), and Warsaw “only” 19.50%. The lowest increase was in Gdansk – 14.84%. These indicators best summarize the effects of the “Safe loan 2%” programme.

Stabilization has occurred on the housing rental market. The highest rent rates increases were noted in Lodz, but the increase did not exceed 1%. On the other hand, in both Wroclaw and Cracow, monthly rental costs decreased by almost 2%.

Compared to the same period last year, the surprising increase in rent was in Katowice – by 4.24%, especially since in other surveyed locations, except for Cracow, rent rates decreased. The deepest decline was in Lodz – by 3.29%. The test for the stability of the commercial housing rental market will be the “September campaign”, when students start looking for suitable accommodation for the next academic year.

The future of the mortgage market in 2024 largely depends on whether the government can launch the “Credit for the Start” programme. After the formation of the new government, I expected a chance to develop new, long-term programmes to solve the housing problem in Poland. As the banking sector, we have recommended proven solutions, positively verified in other countries for many years. Meanwhile, the new government, despite the total criticism of the previous government’s electoral hit, “Safe Credit 2%”, decided to replicate this product in a slightly changed form. I used the term “product” instead of “programme” intentionally. The initial widespread enthusiasm for the product proposed by the new government is fortunately gradually cooling. There are even signals that it may not be implemented. Regardless of the fate of this product, I look forward to the opportunity to discuss systemic solutions that go beyond the duration of one government term, because the Polish housing market needs a coherent, comprehensive and, most importantly, long-term housing programme.

The financial resources of Polish households have already exceeded PLN 2.8 trillion. We are looking for attractive ways to invest the surplus funds. In the first quarter of 2024 alone, Poles bought government bonds worth a total of PLN 15.5 billion. We can and should direct these surpluses towards investing in rental housing to our collective benefit. A proven tax relief for investors, restoring the possibility of amortizing the value of purchased rental housing, and finally introducing equal rights for tenants and landlords would help solve the housing problem in Poland through a dynamic increase in the number of rental housing.

For those who do not want or cannot manage rental housing investments themselves, we should create the possibility of investing in this market through REIT funds. Only a dynamic increase in the construction of rental housing can fill the existing housing gap.

I was pleased to read the statement of the new, though already former Deputy Minister of Development and Technology, Krzysztof Kukucki (former, as he was elected mayor of Wloclawek in the local elections), who said that if someone wants to buy an apartment and can afford it, they can do so, but if someone does not want to buy an apartment or cannot afford it and needs their own place, it is the role of the state and local government to ensure that this need is met. I would only add to the list of rental housing providers the private “apartment owners” and institutional PRS rental companies.

If we also activate the inclination towards long-term, systematic saving for purposes (not only) related to housing, ideally through a fixed-rate contract credit agreement in the form of building societies, or finally streamline the stumbling process of issuing and trading covered bonds that has been lagging for 25 years, then we will have a long-term, coherent and effective housing programme. Of course, to this puzzle should be added the actions of local governments in the area of communal and social housing.

We are waiting for the opportunity for a thorough discussion.

Jacek Furga,Ph.D.
Head of AMRON Centre

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.

Beside the launch of the ‘2% Safe Loan’ programme, the recovery of housing loans market was also stimulated by the decisions of the Monetary Policy Council. In September 2023, it reduced significantly the NBP reference rate, from 6.75% to 6.00%. A month later it was reduced by another 15 basis points. This resulted in WIBOR 3M decrease from 7.59% in November 2022 to 5.62% at the end of 2023. Despite the high loan costs, people were encouraged to purchase a dwelling by rapid increases in transaction prices, decreasing stock of flats available on the market and reports from the President of the National Bank of Poland about the reversal of the upward trend in inflation. In 2023 banks granted over 100 thousand non-preferential mortgage loans.

Throughout year 2023, banks granted 162 375 new housing loans. In comparison to the results achieved by the sector in the previous year, it was more by 28.55%. In terms of value, the result achieved in 2023 was higher by 43.81% than the total value of loans granted by banks in 2022. The average value of a housing loan (in total) in analysed quarter was higher than that recorded a year earlier by 25.24 %, i.e. nominally by PLN 82 764 and at the end of 2023 amounted to almost PLN 408 thousand. However, despite the increase in the number and value of loans granted, the decline in both the number and the value of the housing mortgage loan portfolio in the banking sector observed since the end of 2021 was not reversed. At the end of 2023, the number of active housing loan agreements in Poland amounted to 2 292 thousand, while the total value of Polish households debt due to granted housing loans accounted for PLN 479 billion. This meant a decline in the number of active loans by over 11%, i.e. nominally by 256 thousand loans in comparison to the end of the record-breaking year 2021 – more loans are still repaid than new ones are taken out.

In the fourth quarter of 2023, developers started construction of 34 328 apartments, which was by 6.47% more than in the previous quarter. The number of apartments for which developers obtained permits during this period amounted to 46 916, which meant an increase by 14.32%. A dynamic increase was recorded in the number of completed apartments – in the fourth quarter it amounted to 39 396 apartments, which was by 21.31% more than in the previous quarter.

In comparison to the results achieved by developers in the fourth quarter of 2022, an increase was noted in the number of apartments for which construction permits were issued – by 13.68%, as well as the number of apartments for which construction has started – by 59.98%. A decline was recorded only in the category of completed apartments. In the fourth quarter of 2023, by 10.36% less apartments were completed than a year before.

The fourth quarter of 2023 brought a continuation of price increases observed in the previous quarter, caused primarily by the entry into force of the ‘2% Safe Loan’ programme. The highest increase in the average transaction price was recorded in the fourth quarter of 2023 in Poznan – 7.43%. Slightly lower price increases were recorded in Wroclaw (by 6.22%) and Cracow (by 6.71%). However, the effect of the increase in transaction prices as a result of the ‘2% Safe Loan’ was visible only on annual terms. As a result of the demand caused by this programme, annual increases in the average price of apartments exceeded 20%, which in Cracow and Wroclaw reached 21.97% and 20.94%, respectively. In Warsaw this increase amounted to 18.18%.

The situation on the apartment rental market was completely different. In the fourth quarter of 2023, a seasonal decline in demand with a simultaneous moderate increase in the offer of apartments for rent was noted. As a result, there was a stabilization and even a slight decline in rent rates on the apartment rental market in Poland’s largest cities. The average rent for an apartment in Warsaw was lower than that recorded a quarter earlier by over 1%. The highest increase in the average rent rate was recorded in Cracow – by 1.73%. However, on annual basis, most monitored markets recorded significantly higher increases in rent rates. The highest dynamics of rents was recorded in Katowice – by 8.83% and Cracow – by 4.16%.

Year 2024 should have brought a significant increase in the creditworthiness of Poles. Dynamically rising wages and falling interest rates – such a future is predicted by today’s available forecasts. Our compatriots will therefore be able to afford further purchases of apartments, both to meet their own housing needs and for rent. They just need a safe legal environment and a bit of encouragement and approval for such actions.

The main challenge for the new government is to take action aimed on strengthening the supply of new apartments. The main problem here is to unblock developers’ access to building land, currently owned by local governments or state-owned companies.

We are ready to discuss effective solutions for housing development in Poland. Everything has already been invented here. It is just a question how to combine these individual ideas into a long-term housing program, instead of starting with handing out money, especially to those who do not need it.

The Polish Banks Association is prepared for serious discussions on long-term solutions, supporting the development of the housing market through responsible financing. In this context, the banking sector expects an end to the government’s imposition of so called credit holidays. The Borrowers Support Fund created by banks has been operating for years and every criteria meeting borrower has the right to benefit from it.

A fundamental issue seems to be abolishing of the common sense of questionability of  the provisions of long-term contracts between borrowers and banks that has been built for a few years by the governmental institutions. This is what represent the greatest threat to the stability of the Polish financial system. It is the duty of the government to terminate this process. At this point, it is worth pointing out the need to build a culture of responsibility among potential bank clients for their obligations through a wide-ranging economic education program.

Introducing a balance of rights and obligations between landlords renting out residential properties and tenants by amending of the Tenant Protection Act is also necessary. It cannot be that a tenant who does not pay rent or even damages the rented apartment cannot be removed. This is one of the main barriers to the development of private rental housing, which could solve Poles’ housing problems more effectively than the state. This should also apply to residents of local government housing. According to data from the Statistics Poland, over 45% of apartments owned by municipalities have rent arrears nationwide.

For over a decade, the Polish Banks Association has been consistently presenting to successive ministers responsible for housing ready-made solutions in the form of a long-term savings system for housing purposes in savings and loan associations. We offer a transparent, systemic and universal solution that has been operating successfully for decades in 11 countries of Central and Eastern Europe. In this context, the banking sector generally positively evaluates the Housing Account instrument proposed by the previous government, but it requires changes to arouse wider interest from potential customers.

At the same time, the development of the mortgage bond market, which has been ineffectively built for over 25 years, should be strengthened. Following the example of other EU Member States, we should consistently strive for a housing loan based on a fixed, or in fact periodically fixed interest rate, the condition of which is the development of a compensation model for early repayment acceptable to banks.

Another topic worth recommending is the return, probably for the fourth time, to the discussion on the law regulating the functioning of REITs and encouraging systematic savings in such instruments and taking advantage of the increase in property prices. This may be a generator of another steady stream of funds for housing investments, including stimulating the construction of apartments for rent.

Housing construction can and should be used, following the example of other countries, as one of the most effective drivers of the economy. It is in the state’s interest to support both demand and supply in the housing market. We should definitely be able to afford higher scale of budget expenditure for this purpose than before. It just benefits all of us.

Jacek Furga,Ph.D.
Head of AMRON Centre

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.

In comparison to the same period last year (Q3 2022), 19 531 (by 92.05%) more loan agreements were concluded and their value was higher by PLN 8.835 billion (126.09%). However, the scale of mortgage lending remained at a relatively low level, and the high growth dynamics was primarily due to the base effect, i.e. very poor results of 2022.

This recovery of housing loans market, apart from the obvious impact of the ‘2% Safe Loan’ programme, was also influenced by the Monetary Policy Council, which in September this year, for the first time in 38 months, significantly reduced the NBP interest rates, including the NBP reference rate from 6.75% to 6.00%. What is even more important, the WIBOR 3M index decreased from the maximum level of 7.59% in November 2022 to 5.72% at the end of the analysed period. Decisions about taking out a housing loan were supported by reports from the President of the National Bank of Poland about the reversal of the upward trend in inflation. Moreover, despite the high loan costs, people were encouraged to purchase a flat due to the rapid increase in transaction prices and the significantly decreasing stock of flats available on the market.

Despite a significant improvement in banks’ lending activity in the third quarter of this year, this was another, seventh in a row quarter of decrease in the portfolio of active housing loans. This meant that repayments of active housing loans were still higher than the new loans. As for September 30 this year, the total number of active housing loan agreements in Poland amounted to 2 291 661. This meant a decrease by over 10%, i.e. nominally by 256 899 loans, in comparison to the record level at the end of 2021.

The total value of Polish households debt due to granted housing loans at the end of Q3 2023 amounted to PLN 482.661 billion, compared to PLN 511.265 billion at the end of 2021, which meant a decrease by 5.5%.

Such a large discrepancy between the decline in the number and value of the housing loan portfolio resulted from a dynamic increase in the average value of newly granted loans. The average value of a housing loan granted in PLN in the third quarter of 2023 amounted to PLN 388 679, while for loans granted under the ‘2% Safe Loan’ programme it accounted for PLN 393 400.

The increasing banks’ lending activity resulted in an increase in investor activity on the housing market in the third quarter of 2023, which was confirmed by growth in the number of constructions started by 13.31% and a rise in the number of dwellings, for construction of which a building permit was issued by 4.01%. Unfortunately, the number of dwellings completed was lower. In the third quarter of this year developers completed 32 475 apartments, which was by 4.67% less than in the previous quarter and as much as 10.67% less than a year ago.

In the third quarter of this year, dynamic increases in apartment prices were recorded in all analysed locations. The main factor stimulating the demand for dwellings and prices spike was the entry into force of the ‘2% Safe Loan’ programme when supply of dwellings was limited and decreasing. Growths in prices were noted on both primary and secondary markets, and interestingly, in cities analysed by the AMRON Centre, the rises on secondary market was higher than that recorded on primary market.

The highest increase in the average transaction price in Q3 2023 was recorded in Poznan – 9.31%. Slightly lower increases were recorded in Wroclaw (by 8.89%) and Cracow (by 8.14%). The average price of a square meter of dwelling in Warsaw amounted to PLN 12 988/sqm and was higher than the quarter before by 7.91%. In Gdansk, an increase in the average price accounted for 7.89%, while the lowest price dynamics was recorded in Lodz – an increase by 4.75%, up to PLN 6 995/sqm.

In comparison to the corresponding period of 2022, the highest leaps in the average price of apartments were recorded in Warsaw (by 13.93%) and Cracow (by 13.51%), while the lowest rise rate was recorded in Lodz (by 8.57%). We already informed about this expected consequence of the introduction of the ‘2% Safe Loan’ programme in the previous AMRON-SARFiN Report, when the media was full of declarations by the programme’s authors that it would not have an impact on the housing prices. Apart from the disproportion between demand and supply on the housing market, an important cause for the price increase was also the adjustment of the offer prices of apartments to the loan limits applicable in the programme, observed both on the primary and secondary markets. In addition to the disparity between demand and supply on the housing market, the adjustment of offer prices of flats to the loan limits applicable in the programme, observed both on primary and secondary markets, also played a significant role.

On the rental market, the third quarter of 2023 traditionally brought a seasonal spike in demand, especially from students, as well as an increase in the supply of dwellings for rent. As a result, small changes in rent rates on most analysed markets were recorded. Lodz was the only city, where decrease (by 1.06%) in relation to the previous quarter was noted.

The highest increase was recorded in Gdansk – by 2.17%. Rents grew slower in Warsaw – by 1.07) and in Wroclaw – by 0.48%, while in other large agglomerations the rises amounted to approximately 1.3%.

The huge interest in housing loans with government subsidy in the second half of 2023 has resulted in forecasted banks’ lending activity exceeding the disastrous results of 2022. The number of new loans granted in the whole 2023 may reach the level of 160 thousand, while 126 thousand of loans were granted in 2022. It should be noted that this level of loan activity hasn’t been seen since 2004, which was over 20 years ago. Furthermore, the total value of loans granted in 2023 may even reach PLN 60 billion, while in 2022 it was PLN 43 billion.

The results of the parliamentary elections and the upcoming change of government raise questions about the future of the ‘2% Safe Loan’ programme. According to the AMRON Centre, considering the projected number of loans granted under this programme, no later than February 2024 the Bank Gospodarstwa Krajowego will be forced to announce the suspension of new housing loans applications. The funds allocated for subsidies in this programme for the years 2023 and 2024 are already running out.

The Polish Banks Association actively participates in ongoing debates and consultations aimed at developing proposals and recommendations to enhance the efficiency of the Polish banking sector, for the benefit of the Polish economy. This includes proposals for financing the development of housing construction sector, both in terms of demand and supply. An opportunity to implement responsible, systemic actions in this area based on the provisions of the coalition agreement can be seen. The reversal of the long-standing atmosphere of general doubt about long-term agreements between borrowers and banks, which poses the greatest threat to the stability of the Polish financial system, is a fundamental issue, not only for the banking sector. It is the duty of the government to interrupt this process. On our part, we propose participation in the process of constructing long-term, systemic solutions to create a new housing loan market. We propose verified solutions and financial instruments that provide significantly more effective housing security for citizens in neighbouring countries.

Jacek Furga,Ph.D.
Head of AMRON Centre