AMRON-SARFiN Report 4/2011
Mortgage lending figures of the entire banking sector for fourth quarter of 2011 prove the decrease in both volume and value of granted loans (respectively by 13.02% and 15.54%). However, the results of the whole 2011 were slightly better than those of 2010. The only lending indicator, which reached its maximum level in the history, was the average value of a mortgage loan granted in 2011 – it amounted to PLN 208 482. Currency structure of the new loan portfolio confirms the dominant share of PLN loans (up to the level of 78.58% in 2011). Within the denominated loans, volume of CHF loans had constantly decreased, contrariwise to EUR loans.
Quite different tendencies were observed on the housing market. During the period from January to December 2011, the construction of 162 200 housing units was started, which makes 2.6% more than during the corresponding period of 2010. At the same time, 131 721 housing units were completed (i.e. 3% less than in the previous year) and 184 101 construction permits were issued (i.e. 5.24% more than in 2010).
The downward trend in transaction prices on housing market continued during the fourth quarter of 2011. One of the stimulus of the prices decline was the increase of supply of newly-built dwellings, noted since the third quarter of 2010. From the other hand, mortgage finance reduction resulting in decrease of the effective demand also contributed to the price reduction.
Results of the year 2011, in particular the evident downturn in both volume and value of mortgage lending, obstruct the reliable predictions of the final results as for the whole 2012. However, it should not exceed the results of the year 2011, considering that the mortgage lending criteria are far more restrictive due to the fact that the complete scope of Recommendation S requirements came to force on January 1, 2012. Stagnancy on mortgage loans market, concurrently with the “Family on Its Own” programme, shall support further price corrections on all the greatests housing markets in Poland. More attractive level of housing prices and lack of interesting offers of long-term banks deposits together with shutdown of the one-day deposits may have a positive impact on increase of investments on housing markets. Considering such assumptions, the prognosis of mortgage lending value at the level of PLN 44 billion seems to be justified.
Reflections presented in my introduction to the previous issue of the Report seem to be reasoned. Referring to weaker results of the third quarter related to two previous quarters, I stated that if the results of the fourth quarter of 2011 confirmed the clear drop of lending figures, it should be interpreted as an urge for more radical decisions in the realm of housing policy.
The government document „Main problems, goals and directions of the housing development programme to the end of the year 2020” elaborated in 2010, was approved by the Parliament of previous term, but in accordance with the banking sector’s assessment, its contents does not correspond to Poland’s needs in scope of necessary legal order and the assured long term stabile and secure conditions of housing development. What’s astonishing, the document does not refer to the problem of long term savings for housing purposes. At the beginning of the year 2012, Financial Supervision Commission took the initiative of multilateral discussion on the necessary steps to be taken in order to change the mortgage loans refinancing structure.
Jacek Furga
Head of AMRON Centre
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