AMRON-SARFiN Report 1/2025
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
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