AMRON-SARFiN Report 3/2021
Although the third quarter of 2021 was a time of tightening of the lending policy criteria by some banks related most of all to amended Recommendation S provisions, the dynamic trend of lending growth observed in the previous quarters did not slow down. At the end of the third quarter of this year, the number of active housing loan agreements in Poland reached the level of 2 538 814, and the value of the active housing loan portfolio exceeded the barrier of PLN 500 billion for the first time. During this period, 68 353 housing loans were granted, which is 2.00% more than in the previous quarter and as much as 40.12% more than in the corresponding period of 2020. Quarterly value of newly granted loans in the total amount of PLN 23.229 billion turned out to be record-breaking. It meant an increase by 4.94% compared to the second quarter of this year and by as much as 64.27% compared to the same period last year. It was also caused by the fact that the average value of a mortgage loan increased by 17.24% in the last quarter, reaching the value of almost PLN 340 thousand.
Low reference rate, persisting in the third quarter at the level of 0.1%, encouraged to reach for a cheap mortgage loan, and the rising inflation encouraged to invest savings in real estate.
Dynamic increases in transaction prices continued. The average transaction price in Warsaw at the end of the third quarter of 2021 was PLN 10 738/sqm and was higher by 5.03% compared to the value recorded in the previous quarter and by 12.23% compared to the corresponding period of 2020. Price increases in other monitored locations ranged from 4% to almost 8% per quarter and from 8% to almost 14% per annum.
The third quarter of this year brought a clear change of the downward trend in rent rates that has lasted for a year in all surveyed locations. Compared to the average rents recorded in the second quarter of 2021, the highest increases were noted in Warsaw and Cracow – respectively by 8.54% and 8.22%. Perspectives of further changes in the coming quarters depend on potential restrictions that may be introduced by the government in connection with the already raging fourth wave of the pandemic.
It is also difficult to estimate potential impact of the solutions introduced by the government as part of the Polish Deal programme, both on rent and mortgage lending markets. One thing is certain: these solutions will not support the slowdown of housing prices increase. The possibility of building detached houses without either a permit or any control will contribute to further increases in prices of land and building materials. The state guarantee of the own contribution for potential borrowers may – as estimated by the government – increase the number of mortgage borrowers by 80 000 annually. I do not believe in such numbers, but growth in demand for decreasing number of housing investments newly launched by developers can have only one effect. Further prices increase.
Developers, complaining about more and difficult access to new land for investments, in last quarter started by 15.15% less constructions than a quarter earlier. The number of apartments under construction was practically at the previous year’s level. At the same time, the number of construction permits obtained by developers was by 8.20% lower than in the previous quarter, although it was by 17.85% higher than in the previous year.
After three past quarters, the forecasts regarding the record mortgage lending results in the whole 2021 appear to be reasonable. The total value of over PLN 192 thousand loans granted in this period exceeded PLN 63.3 billion, which already is the highest result in history. The last quarter of 2021 is still ahead of us. It will depend on future decisions of the Monetary Policy Council if we, as a banking sector, exceed the level of 250 thousand granted loans at the end of 2021, but exceeding the level of PLN 80 billion for the new portfolio of housing loans seems to be certain.
Jacek Furga,Ph.D.
Head of AMRON Centre
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