AMRON-SARFiN Report 2/2018
The housing market is heating up! In the first half of the year, the results of banks’ lending activity were the best for 7 years – almost 109 thousand new housing loans were granted. The value of new loan agreements granted in Q2 2018 – in the amount of almost PLN 14 billion – was the best quarterly result since 2010. The value of household debt in Poland due to granted housing loans for the first time exceeded the level of PLN 400 billion.
The average value of newly granted housing loans in domestic currency amounted to PLN 255 861, which was more by PLN 22 250 (9.52%) comparing to the value recorded in Q1 2018. Increasing value of granted housing loans was favoured by good macroeconomic situation in Poland together with increase in housing prices and growing demand for larger dwellings.
On the primary market, a trial of strength between developers and investors in dwellings for rent was observed, which concerned dwellings prices. In Q2 2018 developers started construction of 35 631 dwellings, i.e. by 15.94% more comparing to the previous quarter. However, the number of dwellings completed and the number of construction permits issued were lower, respectively by 12.49% and 11.90%.
High demand on the residential market and growing costs of construction work and building materials led to increase in transaction prices in the largest Polish cities. In Q2 2018, a slight decrease in the average transaction price of 1 sq.m. of floor area was noted only in Bialystok – by less than 1% in quarterly terms. In other locations, the quarter’s increases at the level from 1.5% to 3% were observed.
As a decrease in supply of new investments in the largest cities was observed, caused by suspension of investment and construction processes, and – at the same time – demand on housing market remained at the high level, continuous increase of transaction prices can be expected, which would translate into increase in value of newly granted loans. The signals from developers indicate that those purchasers, who buy dwellings for their own needs usually take out a mortgage loan, while those, who invest in flats for rent usually pay with cash.
Still no news about the government’s ‘Flat Plus’ Programme, although on June21 this year, the ‘Housing Dialogue Forum’ conference organized by BGK Nieruchomości S.A. took place at the National Stadium. With an impressive number of over 400 participants and a full representation of the government, more than 20 debates on the most urgent problems in housing policy were held. Representatives of the Polish Banks Association participated in several of them. The organizers announced that within a year a Green Book will be prepared, based on conclusions from these debates. Meanwhile, the proposals of alternative solutions submitted once again by the Polish Banks Association did not meet with any interest from the government and the Council of Housing.
The results of the first half of the year once again confirm our forecast on the possible exceeding of 200 thousand housing loans for a total value of PLN 50 billion in 2018.
Jacek Furga,Ph.D.
Head of AMRON Centre
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