AMRON-SARFiN Report 3/2014

The analysis of banks’ lending activity in Q3 2014 shows that the summer months have brought a decline in both number and value of new granted loans. In comparison to Q2 2014, the value of new loans was lower by 3.61% and amounted to PLN 9.232 billion. Polish banks granted 43 653 new mortgage loans, which was 4.06% less than in the previous quarter. Lending activity was also lower comparing to the same period last year. From January to September 2014, banks have signed 131 thousand new agreements for a total value of PLN 27.6 billion. Comparing these results with the same period of 2013, the forecast result for 2014 can be estimated in a slightly higher level than in 2013, but lower than in 2012 – in terms of both number of mortgage loans (we forecast that the total volume of new loans will amount about 180 thousand) and the total portfolio’s value (i.e. about PLN 38 billion).

The share of non-performing mortgage loans in total housing loans portfolio amounted to 3.19% and it remained practically at the same level in comparison to the previous quarter. The quality of loans denominated in foreign currencies was slightly worse (i.e. by 0.75 p.p.) – share of non-performing mortgages in the portfolio of foreign currency loans amounted to 4.21%.

Quite different situation was observed in the area of housing investment. Q3 2014 was another quarter of growth. Comparing to the previous quarter, both the number of completed housing units (by 10%) and the number of started constructions (by 6%) increased. Slightly lower growth – at the level of 3% – was noted in number of construction permits issued.

In Q3 2014, the average transaction prices per square meter of housing unit changed slightly. In Cracow and Bialystok a slight decrease of average transaction prices was noted, respectively by PLN 44 and PLN 11 per square meter. In two cities, i.e. Wroclaw and Lodz, average transaction prices increased by over PLN 100 per square meter. It can be stated that in Warsaw, Wroclaw and Lodz prices remained at the level of the previous year (Q3 2014 / Q3 2013). Generally, we can confirm the stabilization of the average prices on practically all of the analyzed markets.

Results of the “Flat for Youth” government Programme noted in Q3 2014, which were worse than in Q1 and Q2 2014, confirmed my earlier skepticism. It will be difficult to acquire more than 15 thousand Programme participants by the end of the year. The share of loans with subsidies in total number of newly granted loans has systematically decreased from over 10% in Q1 2014 to 8.4% and  7.5% respectively in next quarters.

Meanwhile, the housing problems of Polish families are mentioned in many researches and surveys as one of the two main causes of emigration, demographic crisis and dissatisfaction. Starting a system supporting long-term saving on housing purposes is a chance for stimulate the housing finance market and improvement of the housing situation. Unfortunately, recommended by the Polish Banks Association a long-term saving system is still waiting for a reliable assessment of the government.

Jacek Furga
Head of AMRON Centre

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