AMRON-SARFiN Report 3/2013
The third quarter of 2013 in terms of results of both volume (45.8 thousand of new loans) and value (PLN 9.5 billion) of newly granted loans, was already the second period recording the increase of both indicators. Unfortunately, even sustaining such speed of growth – on the level of c.a. 4% – in the following fourth quarter of 2013, does not change the fact that the most probable results of the year 2013 will turn out to be lower than those achieved in the worst as far as till now, the after-the-crisis year 2009.
Much more attractive information are given by the developers’ sector, according to whom there is a significant increase of housing units sale and significant reduction of earlier reserve of unsold housing units. There is also a growing number of housing transactions (both on the primary and secondary market) realized without banking loans – particularly in the most cheapest and most expensive housing units segments.
Those who apply for a mortgage loan, try to benefit from the last months before the entering into force the forth version of Recommendation S issued by the Financial Supervising Commission and to take a loan for the full amount of the investment. Q3 2013 brought a significant increase of the number of loans with LtV level above 80% – by 6 percentage points. Changes in the structure of LtV for new loans prove that participants of real estate market (both banks and housing units purchasers) respond the upcoming amendment to Recommendation S entering into force on January 1, 2014 and use the last possibility of financing the purchase with a loan for 100% of the property value.
The summer months were conductive to new flats constructions – third quarter 2013 brought a slight increase in the number of started constructions. The number of investments started from July to September was 38 903, which meant an increase by 4% comparing to the previous quarter. In the analyzed quarter, the number of completed housing units increased to 35 241 comparing to 30 856 completed housing units in Q2 2013. The number of issued construction permits decreased by 4% in comparison to Q2 2013 and in Q3 2013 amounted to 36 996.
Analyzing the housing construction results for the period of three ended quarters of the year, we should stress that there was a constant improvement of active indicators from the very beginning of the year up to now. On the other hand, the economic activity of investors in the domestic housing market is still at a much lower level than in previous years. In order to make own decisions on strengthening own economic activity, the developers’ sector is currently expectant for some positive signals on future access to banking finance both for developers and individual housing purchasers and – at the same time – for the news on government’s planned activities aiming to support the housing market. However, factors proving a change in investors’ (mostly developers) attitude from conservatively-expectant to pro-investment seem to be more and more distinct.
Such a market diagnosis is confirmed also by the first signs of growth in investors’ interest in housing units purchase, reflected in the observable change in transaction prices trend. In the analysed Q3 2013, the price increase was noted in all analysed cities except in Wroclaw, where the average price for 1 sq.m. of a flat decreased slightly (by 3 6 PLN) comparing to the previous quarter. Average transaction prices in the biggest cities of Poland increased from 65 to 95 PLN for a square meter of floor area of a flat. Although the annual analysis indicated an increase in average transaction prices only in three cities: Bialystok by 101 PLN/sq.m., Poznan by 121 PLN/sq.m. and Gdansk by 66 PLN/sq.m., but the results of the forth quarter may confirm the change in the trend for the remaining locations.
At this point with great pleasure and satisfaction I would like to inform regular readers of AMRON-SARFiN Report that in response to the growing need for the most current market information, AMRON Centre decided to present the current average housing price quotations. Such values shall be taken basing on sales agreements concluded in the given period on the secondary market in weekly cycles and will be presented on our website (www.amron.pl) on interactive line charts, which will allow to collate data from different locations and on different housing categories for individual analyses of the particular housing market segments. I sincerely invite you to get acquainted with our new offer.
Another decision of the Monetary Policy Council to cut the basic interest rates by another 25 basic points and some signals of the improving economic situation should contribute to further recovery on the housing transaction market and on the mortgage loans market. In the last quarter, the government and the parliament were concentrated on ending the legislative process, enabling the initiation of ‘Flat for Youth’ Programme. An opportunity to boost housing financing market and the improvement of the residential housing situation in our country is – still waiting for a fair assessment by the government administration, meanwhile recommended by Polish Banks Association – the launch of a system of long-term savings based on the model Buasparen system of saving-building banks.
Jacek Furga
Head of AMRON Centre
Download report