AMRON-SARFiN Report 1/2012

Previous editions of the report confirmed the seasonal cyclicity of both mortgage loans market and – what is more obvious – residential development. Therefore, the  analysis of Q1 2012 results is performed in relation to the previous quarter (Q4 2011) results and the results of corresponding period of the previous year (Q1 2011). Despite such an approach, the unambiguously descending mortgage lending figures as for last quarter exclude optimistic prognoses. Forecasts of weakening mortgage lending results in 2012, expressed in previous two editions of our Report, has unfortunately been confirmed.

Both volume (48 700 loan agreements) and the value (PLN 1.2 Mio) of newly granted loans in Q1 2012 proved to be lower than both in Q1 and Q4 2012. On top of that, as a result of exchange rates changes (EUR/PLN, CHF/PLN), total housing loans debt declined – for the first time in analysed period – to PLN 308 billion.

The only mortgage lending indicator that reached it’s maximum was the average value of a housing loan, which exceeded the level of PLN 209 000. In new granted loans currency structure, the share of loans granted in PLN grew by 7% and it comes up to the level of 85% share in total portfolio, whilst the share of loans denominated in CHF has reduced to the level of 1% of newly granted loans.

Housing development sector results look surprisingly well against the background of weakening mortgage lending figures. According to the data published by Central Statistical Office, the number of completed housing units increased in Q1 2012 by 32% in relation to Q1 2011 results with simultaneous slight (approx. 2%) growth of number of construction permits issued constructions started.

On housing market, the continuous drop of transaction prices is still observed. The most significant stimulus of the prices decline was growing supply on the primary market, including number of new investments started by developers before the new law on trust acconts comes into force. On the other hand, decrease in mortgage lending evoked reduction in effective housing demand.

I could summarize the results of the first quarter of 2012 with words „Didn’t I say so?”. Banks’ withdrawal from currency loans offer, new requirements of Recommendation S binding since January 1, 2012 and limitation of the “Family on Its Own” programme resulted in numbers reflecting mortgage lending and housing market in the first quarter of 2012. In spite of that I consequently sustain my prognosis of the total volume of mortgage loans granted in 2012 at the level of PLN 44 billion.

I also sustain reflections presented in my introduction to the previous issues of the Report – the clear drop of lending figures should be interpreted as an urge for more radical decisions in the realm of housing policy. What we need is a long-term state programme for development and support of housing development, including long-term savings for housing purposes.

Jacek Furga
Head of AMRON Centre

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