Housing lending in Poland in 2023

In the third quarter of 2023, Poland experienced a sharp increase in the number of mortgage applications. In the third quarter, 118.9 thousand loan applications were submitted, while a year ago there were only 40.1 thousand. This is an increase of more than 195% year on year. One of the main reasons for the growth is the great interest in the “Safe Loan 2%” program, which has been in effect since July of this year.

In the third quarter of 2023, Poland experienced a sharp increase in the number of mortgage applications. In the third quarter, 118.9 thousand loan applications were submitted, while a year ago there were only 40.1 thousand. This is an increase of more than 195% year on year. One of the main reasons for the growth is the great interest in the “Safe Loan 2%” program, which has been in effect since July of this year.

In total, in the third quarter, more than 60 thousand applications for participation in this program were submitted and 17.5 thousand applications for loans were satisfied. The number of loans issued under the program amounted to 41% of all housing loans issued. At the same time, the average value of applied for loans increased to 394 thousand zlotys – by 21% during the quarter.

The impact of the “Safe Loan 2%” program on the housing market

As we have already said, there was significant demand for home loans in the third quarter. The first signs of a recovery in demand for loans were already visible in the second quarter of 2023. Then, in quarterly terms, the demand for housing loans increased by 50%, and the number of loans issued - by 42%. However, year-on-year the dynamics were still negative. And only in the third quarter, with the launch of the “Safe Loan 2%” program, the provision of housing loans increased both quarterly and annually. The number of applications increased by approximately 100% QoQ. and approximately 200% y/y, and the number of loans issued increased by 35 and 100%, respectively.

The recovery of the housing loan market was due to several factors, the most important of which is the impact of the “Safe Loan 2%” program.

The first significant regulatory change was a decision by the Polish Financial Supervisory Authority in February 2023, which led to an increase in the number of creditworthy people and the possible volume of financing. Then, in July 2023, the “Safe Loan 2%” program was launched, which was supposed to increase the affordability of apartments for people under 45 years of age who do not have their own apartment. The program provides a maximum loan amount of PLN 500,000 for a family consisting of one person and PLN 600,000 for a married couple or a couple raising a child.

Another factor boosting Poles' creditworthiness was the decline in the WIBOR index in response to the September 0.75 point cut in the base rate to 6 percent and the expectation of further interest rate cuts as well as real wage growth in the third quarter.

In the third quarter of 2023, the “Safe Loan 2%” program accounted for 41% of all issued housing loans. The program significantly increased the scope of the housing lending recovery. In July, the program accounted for 11% of all loans issued, in August – already 33%, and in September – 65%. The strong growth portends a return to boom in 2021, with a total of 70,000 home loans issued in the third quarter.

We can say that due to preferential loan repayment terms, the program accelerated borrowers’ decision to receive a loan. The increase in the number of loans in the second quarter and the growth in real wages suggest that even without the “Safe Loan 2%” offer, the number of loans will also increase in the third quarter.

The number of housing loans issued in 2023 under the “Safe Loan 2%” program and outside the program is as follows.

According to the program: January - 6.2 thousand, February - 6.8 thousand, March - 9.8 thousand, April - 9.8 thousand, May - 11.1 thousand, June 11.5 thousand, July - 9.9 thousand, August - 9.0 thousand, September - 6.3 thousand.

Outside the program: July - 1.2 thousand, August - 4.5 thousand, September - 11.8 thousand.

In the third quarter of 2023, the average cost of a loan issued increased and amounted to PLN 394,000. This is 21% more than in the third quarter of 2022, in which it amounted to 324 thousand zlotys. And 17% more than in 2021 (PLN 335,000). In 2022, despite inflation averaging 15.5% during the quarter, the average cost of borrowing fell. In 2023, borrowing costs grew faster than average quarterly inflation (8%). The average loan amount is projected to continue to increase due to rising housing prices.

Source: website pie.net.pl