AMRON-SARFiN Report 1/2019

The Polish households financial security increased, although it was built on government declarations and social transfers. On the other hand, the media created the image of investing in dwellings for rent as attractive. That is why the atmosphere on the residential investment market has still been warmed up. In addition to buyers looking for dwellings for short-term rent, the new group of investors in house flipping has emerged, looking for the cheap dwellings in poor condition on secondary market for renovation in order to quick resell. What is more, the housing loan availability in Poland increased and the President of NBP declared the stability of low interest rates. The dynamically growing average value of a housing loan was a clear confirmation of the growing availability of mortgage loans. On the other hand, a weakening developers’ enthusiasm for starting new investments encourages to accelerate the decision to invest in a flat. The number of construction permits issued was systematically decreasing, but it meant a return to normality after the construction boom period, rather than a rapid collapse on the housing market. Signals from the developers sector showed that the sale of new dwellings was over 11% lower than a year before. Developers’ activity in the following quarters may be affected – rather in negative way – by a new Developers’ Act, which will charge developers with a contribution to the Development Guarantee Fund.

In the first quarter of 2019, over 50 thousand housing loans were granted for a total amount of over PLN 13.5 billion – it was a slightly weaker result in comparison to the previous quarter.

Price increases on the housing market continued, although a slowdown in growth was noticeable. In the first quarter of 2019, the average transaction price per 1 sq.m. of floor area of dwelling in Katowice agglomeration even decreased and in Gdansk it did not change. However, in relation to the analogous quarter of 2018, the average price per 1 sq.m. of a flat increased in all analysed locations by 5-10%. The growth rate of the average dwelling rent also decreased.

What will be 2019? After three years of the high-sounding announcements of the National Housing Programme, the results so far have been disappointing. Initial declarations by the co-authors of the Programme about the planned number of completed dwellings have been quickly reduced and the time perspective was extended! In Autumn 2019, the voters will decide indirectly about the Programme’s future.

Although the number of newly granted housing loans was slightly, but systematically decreasing on a quarterly basis from the first quarter of 2018, at the same time the average value of mortgage loan was increasing, therefore the result of 2019 at the level of 200 thousand newly granted loans for a total value higher than in the previous year, i.e. exceeding PLN 55 billion, is possible to achieve.

Jacek Furga,Ph.D.
Head of AMRON Centre

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