A typical loan taken out in the first quarter of this year was in Polish zloty, for a period of 25-35 years, in the amount of 100-200 thousand, with own contribution below 20 percent, according to the data collected in the Amron-Sarfin report. The market on a quarterly basis continues to record declines, but optimism gives a better result compared to the first quarter of 2014.
In the first quarter of this year, banks granted over 42,000 housing loans with a total value of nearly $ 9 billion. This result is worse than in the fourth quarter of 2014 by 1.92 percent in terms of volume and by almost 2 percent in terms of value. However, the decrease in both the quantity and value of loans granted in the first quarter is a phenomenon that we observe every year. The end of the year often promotes the search for real estate and finalizing transactions. On the other hand, in the first months of each year, we regularly observe less interest in loans, and only in the second quarter do we usually see an increase in lending. The smaller number of loans in the first quarter of this year (similarly as in the first quarter of 2014) was also caused by the next stage of implementation of Recommendation S. All loans granted since January this year may not be higher than 90 percent of the property value, which in practice means the need to bring 10 percentage own contribution. Therefore, many customers with a small down payment accelerated their purchase decisions and finalized transactions in 2014.
Growth year on year – is it a ray of hope?
The increase in lending compared to year-to-year may be optimistic. Compared to the same period of 2014, the value of loans granted increased by 1.40 percent and the amount by 0.54 percent. However, compared to 2013, growth is even greater – in terms of value by almost 12 percent, and in terms of volume by 1.3 percent. The slowly growing market may increase further in subsequent periods, which is indicated, among others, by the results of the latest NBP survey addressed to the chairmen of credit committees. Most banks expect an increase in demand for loans and announce easing of the criteria for granting. Interest rates that continue at a low level will also help the market grow.
What loans have we taken out?
The average value of the loan granted in the first quarter of 2015 was $ 210,997 and was higher by $ 1,263 than three months earlier. However, in quantitative terms, the largest number of loans (36.47 percent) was incurred in the amount of $ 100-200 thousand. Only every fifth loan was higher than $ 300,000. Despite the requirement to make an own contribution, the LTV (loan to value) structure has hardly changed. Loans in excess of 80 percent of the collateral value (49.62 percent) still dominate, so we can assume that the majority of clients decide to make a small down payment. We did not observe any major changes in the term of the loan. Although Recommendation S suggests taking loans for a maximum of 25 years and avoiding loans with a period of up to 35 years, the majority of borrowers (65.03 per cent) have borrowed between 25 and 35 years. The largest number of loans in terms of value was taken in Warsaw – in the first quarter it was over 35 percent. This result is a surprise, because it mainly results from the size of this market and the price of real estate in Warsaw. The combination of these two elements results in the fact that the majority of housing loans are taken by the inhabitants of Warsaw. Only the increase in the capital’s share can be surprising. During the year, it increased from just under 25 percent in the first quarter of 2014 to 35.05 percent this year.