Despite the tightening of criteria, in the first quarter of 2016, there was a significant increase in demand for housing loans – according to the analysis of the Capital lender. Does this mean that the growing requirements will not stop the long-lasting bull market in the real estate market?
NBP research conducted in cooperation with 25 banks shows that in the period from January to March 2016, the criteria for granting housing loans were tightened. The increase in margins mainly concerned higher risk liabilities. Many banks also declared changes in the rules regarding additional collateral and raised the level of own contribution.
The tightening of margins was not a surprise for the industry. – Greater requirements of financial institutions introduced at the beginning of the year are completely understandable due to the entry into force of Recommendation S in the field of obligatory own contribution of 15% and the recommendation of the Polish Financial Supervision Authority regarding the assessment of creditworthiness – assesses Good Finance, Sales and Marketing Director at the Geo Development Group.
Good Finance fueled demand
NBP analysis proves that the strict criteria did not surprise customers either. On the contrary, in the first quarter of the year, there was even an increase in demand for housing loans. In the banks’ opinion, this is primarily the effect of concerns related to the exhaustion of the funds from the “Apartment for the Young” program.
The economic situation of households or consumer spending, which usually determines the popularity of banking products, turned out to be almost insignificant in this period. – Let us remind you that in mid-March Fine Bank announced the suspension of accepting applications under Good Finance for 2016 – says Good Finance. – The reason for the decision was a total reservation of USD 715 million allocated for subsidies – he adds.
Where does the growing demand come from? USD did not completely close the road to Good Finance, enabling the submission of documents for 2017 and 2018. As a result, 5,000 new applications were submitted on the day of publication of the USD communiqué.
Thanks to this, the entire 2016 turned out to be record-breaking: over 27,000 applications, i.e. three times more than in the first year of the program. According to data from the end of April 2017 had more than 3,000 documents, using the limit in 12.02 percent, and in 2018 36 applications were submitted, reserving the limit is 0.12 percent.
The housing market boom continues
The growing popularity of housing loans proves the constant interest of buyers and the smooth sale of the market offer. According to the analysis of the National Real Estate Market, the first quarter was characterized by a surprising sales dynamics of new premises.
This market situation is a simple way to maintain a bull market in the property market. From January to March, 17.7 percent were commissioned. more apartments than in the corresponding period of 2015 (data from the Central Statistical Office). Individual investors and developers had a significant share in the success.
The latter recorded the largest increase – they put into operation by 53.7 percent. more places than a year ago. – Greater activity of developers is associated with benefits for people looking for their own “M”. The offers are more diverse and better suited to the expectations of customers – emphasizes the Sales and Marketing Director of the Geo Group.
Buyers from Lower Silesia could count on a large variety. In the period analyzed by the Central Statistical Office, the largest, over 68% increase in the number of dwellings completed was recorded in the Lower Silesian Voivodship.
Optimistic forecast for the future
Higher requirements and, at the same time, growing demand for loans and flats is the balance sheet for the first quarter of 2016. How can the market change in the second half of the year?
Although banks declare to maintain their policy in this segment, everything seems to indicate that the second quarter will be equally intense. The reason can be even the season of the year – spring and summer are always associated with increased movement in real estate.