An average of 2,500 housing loan applications were made per working day in Poland last month, according to data from the Credit Information Bureau (BIK). That was “the highest figure in years”, according to Bartosz Turek, chief analyst at HRE Investments.
Turek attributes the change to greater market optimism and businesses rebounding after months of lockdown. “A huge group of Poles who recently put off aspirations for their own real estate are now deciding to buy,” he says.
Moreover, financial institutions are keen to offer loans to make use of idle capital – with a preference for mortgages, which involve large sums and usually carry less risk of default.
“Today, the problem of banks is an excess of money [deposits] that they have to put to work,” said Turek. According to HRE Investment’s report, banks have thus become more accommodating to loan applicants.
“Banks are looking more favourably at people who earn in a different way than through an employment contract for an indefinite period,” said Turek.
Housing loan applications were already high in April and March, at around 2,400 per day, Turek told TVN24. In May, a total of 47,600 applications were made, worth an average of over 800 million zloty (€180 million) a day, reports Business Insider Polska.
A recent report by the Polish Bank Association (ZBP) showed that, in the first quarter of this year, the most housing loans (most 57,200) were issued for a decade, notes Gazeta.pl. The total value borrowed, almost 18 billion zloty, was the highest ever recorded.
While Poland’s central bank has kept its key interest rate unchanged at 0.1% since last May, as prospects for the economy improve there will be more pressure to increase rates to rein in galloping inflation. This would likely result in an increase in repayment rates for borrowers.
“If someone is looking for a housing loan today, they should remember that these debts will start to rise within a few quarters,” warned Turek. “When interest rates go up, most mortgage instalments will go up. However, these increases should not be too sharp.”
Main image credit: ulleo/Pixnio
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
