The year 2025 is shaping up to be promising for the residential mortgage market. According to Dr. Jacek Furga, President of the Center for Banking Processes and Information, interest in housing loans is expected to continue growing. Paradoxically, this trend is partly fueled by the recent announcement from the Minister of Development and Technology that the “0% Loan” program will not be implemented. Despite the lack of new support programs, the mortgage market closed 2024 on a strong note, with the quality of zloty-denominated housing loans remaining exceptionally high.
“We expect to end 2024 with approximately 200,000 mortgage loans issued throughout the year. This represents not only an increase compared to the previous year but also a significant rebound from 2022, when interest rates were exceptionally high,” Dr. Furga told Newseria Biznes.
Steady Growth Despite Challenges
Data from the Credit Information Bureau (BIK) reveals a slowdown in November 2024, with banks issuing 35.7% fewer housing loans year-on-year and 10.5% fewer compared to October 2024. In value terms, there was a decline of 31.9% year-on-year and 9.5% month-on-month. However, between January and November 2024, the housing loan market showed robust growth, with a 31.9% increase in the number of loans issued and a 45.8% rise in value compared to the same period in 2023.
Despite the slowdown in November, the projected annual mortgage lending volume of PLN 81 billion for 2024 has already been surpassed, reaching PLN 80.72 billion in just 11 months.
Impact of the 0% Loan Announcement
“The recent confirmation that the 0% Loan program will not be implemented has paradoxically boosted interest in housing loans,” noted Dr. Furga. “This decision, anticipated for some time, removes uncertainty and may encourage those who were waiting for the program to make their purchase decisions in the coming months. As a result, 2025 is expected to be another strong year for the mortgage market.”
The 0% Loan was a proposed government program aimed at subsidizing housing loans, including for purchasing apartments or building single-family homes. However, in mid-December 2024, the Minister of Development and Technology, Krzysztof Paszyk, announced that the program would not go forward. While acknowledging Poland’s high mortgage interest rates—nearly double the EU average—Paszyk assured that a new housing initiative would be unveiled in the first quarter of 2025.
Increased Affordability and Demand
BIK analysts highlight a rise in borrowing capacity due to an 8% real increase in wages, allowing consumers to take out larger loans. In November 2024, the average mortgage value reached a record PLN 429,200, up 6% from the previous year. Notably, higher-income individuals are currently driving demand for housing loans.
“A long-term fixed-rate mortgage would be an ideal solution for the housing market. Drawing from U.S. and German experiences, a 5% fixed-rate mortgage over the entire loan term would be optimal,” suggested Dr. Furga. “Those who can afford such a loan would buy property, while others would turn to rentals. However, Poland needs more rental properties, and tools like REITs could help increase supply.”
The Role of REITs in Expanding the Housing Market
Real Estate Investment Trusts (REITs), widely used in countries like the U.S., are seen as a promising solution for expanding Poland’s rental market. A recent report by JLL and Bank Pekao estimated that individual Polish investors could potentially invest around PLN 11.5 billion in domestic REITs.
“Poles have substantial savings that could be directed into real estate. Instead of discouraging investment with additional taxes on second or third properties, the government should encourage such investments. More rental properties on the market will benefit everyone by driving down rental prices,” Dr. Furga emphasized.
By fostering predictable market conditions and exploring innovative solutions like fixed-rate mortgages and REITs, Poland’s mortgage and housing markets could continue their upward trajectory, benefiting both buyers and renters alike.
