August 10, 2022

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Mortgage loan gap.  The expert comments on the new data: This will not stop inflation

Mortgage loan gap. The expert comments on the new data: This will not stop inflation

Fresh Mortgage loan information Confirm that the market Real estate Powerful cooling experience. In July, the number of home loan applications fell nearly 70 percent year on year. The month-to-month drop is also significant – close to 30%. It must be emphasized that it is not about the number of loans granted, but the huge number of applications made. This is important because some customers place multiple orders to different banks, relying on the ability to compare offers.

Freezing property market? It hasn’t been this bad since 2007

The credit reference bureau expert stresses that the decline in the interest rate on loans is very clear. The situation is the worst in 15 years.

It hasn’t been that bad since the beginning of this data collection by BIK. It should be remembered that the number of people applying for a housing loan has been declining regularly since April 2021, that is, before the start of the interest rate hike cycle. Increases exacerbate this negative process

Professor wrote. Waldemar Rogowski.

According to the bureau expert, the July reading confirms a slowdown or even a freeze in housing loan demand. What is the effect of the real estate market on the economy? will make it inflation Will you start to fall? One of the experts explained this in a comment to Gazeta.pl.

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Poles do not want housing loans? Expert: It is not profitable to take now

Piotr Kuczyński, a financial analyst from Dom Inwestycyjny Xelion, is not surprised by the latest information from the real estate market.

– The fact that, according to BIK data, in July the value of inquiries about housing loans decreased by 2/3 is not surprising. The increase in interest rates was very rapid – from 0.1 per cent. In October 2021 to 6.5 per cent. Now, it is not excluded that there will be more hikes. Webor It increased by about 0.2 percent. to more than 7%, which led to a significant increase in the loan rate at a variable interest rate. He said that the fixed-rate loan is not profitable at the moment, because it will be very expensive.

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He also mentioned other important factors that could have discouraged the desire to obtain housing loans. – The Polish Financial Supervisory Authority (KNF) has ordered banks to calculate the creditworthiness, assuming that the rates will increase by 5 p. All this significantly reduced the possibility of obtaining loans, because in many cases the creditworthiness decreased by 40%. He pointed out that it is also important to wait for an economic slowdown, and this may raise concerns about the sustainability of employment.

Real estate analyst. Talking about making profits for banks

According to the expert, banks will limit lending, as it will lead to a rapid drop in demand. – You should hit their earnings. If you add to this the losses caused by holidays Not surprisingly, the WIG Banks index has lost 45 percent since February. – said Piotr Kuczyński.

However, in his opinion, it may turn out that the discount has already absorbed all the losses of the banks and they are already discounted.

Home loans in reverse. Inflation will go down? The expert explains

A fall in the demand for different types of goods usually has some effect on inflation. According to the expert, in this case, we are dealing with two opposing mechanisms. On the one hand, the pace of money loss may slow down due to the decrease in the number of loans, and on the other hand, the Poles received a huge financial boost.

– Cooling the real estate market will not stop inflation. Yes, an increase in the loan premium will reduce the amount of money in circulation, which in theory could slightly reduce inflation, but credit holidays partially work in the other direction. In addition, inflation in a relatively small part (in my opinion a maximum of 40%) depends on the spending of the Poles – mainly imported – at the discretion of the analyst.

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The expert explains why Poles stopped applying for an apartment on a loan

Oscar Sokovsky, an expert at HRE Investments, explains in the analysis prepared for Gazeta.pl that the reason for the decrease in the number of loan applications is the increase in interest rates that have occurred since October 2021.

– It is possible that potential borrowers are discouraged by high premiums – let’s name a person who took out a loan in the amount of 300 thousand PLN, for 25 years with a margin of 2.6 percent. Still in September, he paid a premium of nearly 1.4 thousand. zloty. Currently, it is more than 2.6 thousand. zloty. So we have an increase in the premium amount of about 90 percent. – Lists.

In his opinion, the decline in creditworthiness may be more important. – This may discourage the Poles from going to the bank to apply for a loan. Before increasing the interest rate cycle, a family of three with a national average income could count on 700,000 PLN. gold loan. At the moment, if the same family goes to the bank, they will receive an offer of about 400,000. zlotys – says the expert.

According to the HRE analyst, the market needs to be patient. No wonder the Poles put off their loan decisions until later, hoping for a better moment. Taking into account the loan amount and the price of the apartments, they will have to largely verify their dreams of having their own “M” – he says.

He also confirmed that the KNF office also contributed to the decline in creditworthiness. It is about recommendations, according to which, among other things, the so-called increase in the interest rate by a minimum of 2.5 percentage points. Up to 5 percentage points – This means that when checking creditworthiness, banks must add at least 5 percentage points mentioned above to the current WIBOR rate and margin. Practically speaking, in July 2022, this meant testing creditworthiness by assuming the home loan interest rate at the level of 13-15 percent. – Expert lists.

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What’s next for the real estate market? Light at the end of the tunnel

Is the future of the Polish real estate market only bleak? According to Oskar Sukowski, we can talk about a light in a tunnel. – As for possible scenarios in the context of the current situation, it is worth noting the first signs of improvement in the housing loan market. The search for them has so far been in vain. We have media reports and data for MPC members mentioning a recent rate hike which is very slight, by 25 basis points, expert says.

So it is likely that the price-raising cycle will soon be over. According to the expert, there are more signs that allow optimism. – NBP interest rates may be reduced next year. Such a development of the situation and the future cancellation of UKNF recommendations when checking creditworthiness could lead to a significant improvement in terms of mortgages in the coming year – summarizes Oscar Sukowski.

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The real estate market is calming down. You have to wait longer for someone to like

There are more signs of the property market cooling off. Portals specializing in the analysis of advertisements related to the sale and purchase of an apartment are experiencing a change of trend. Last year – marked by high interest rates, declining lending, inflation and the war in Ukraine – extended the selling time. It is particularly evident in the larger apartment segment, where it was felt to extend display life by up to 81%. brokers. In the case of homes, this was confirmed by 77 percent. Agents, cut off 56 percent. – says Alicja Palińska from the analysis department at Nieruchomości-online.pl.

He also points out that the opposite situation prevails in the rental market: – In the case of large studios and apartments, a shortening of the search time for a tenant was observed by about 60 per cent. Threads.