Decline in interest rates and improved price-to-wage ratio

During the last six months, many things have changed in the housing market. Therefore, experts from RynekPierwotny.pl decided to repeat the calculations made in the summer of 2024. The analysis answers the question of how large a new flat a typical borrower from the biggest cities can buy. It’s worth checking whether the housing affordability index in January looked better than in the summer of the previous year.

Loan for 25 years

Just like before, calculations pertain to the size of a new flat that can be purchased with a minimal down payment (10%) and a repayment period of 25 years. The results, expressed in square meters, were calculated for a single person and a childless couple. It is assumed that the model loan repayable in equal installments has an interest rate equal to the average for new “mortgages” according to the latest NBP data (7.45%).

Another important condition states that the first installment should not exceed the safest level, which is 40% of net household income. The net income was determined by setting that both a single and each of the couples earns an average monthly net wage in the corporate sector (from a given city). In summary, the calculation assumptions are the same as those for June 2024, which ensures the comparability of the calculated values.

Results better by 2 – 3 square meters

The results are still very diverse, but generally better than in June 2024. This is a brief summary of the January analysis. The following graphic confirms that the situation of “M” purchasers from various cities was still very different. Traditionally, Warsaw performed the worst, with a new area available for purchase by singles was 26 sq m. However, this meant an increase of 3 sq m compared to June 2024. In the capital, the ratio of wages to square meter prices improved. The average mortgage interest rate considered during the analysis also fell (from 7.93% to 7.45%).

The positive impact of the lower interest rate was, of course, also visible in the other cities analyzed. Considering all the urban centers studied, the average area that a single person could buy increased by 2 sq m compared to June 2024 (from 29 sq m to 31 sq m). The positive change concerning the model couple was 3 sq m (an increase from 58 sq m to 61 sq m). Not only in Warsaw, the improved results were influenced by a better ratio of new flat prices and wages. The accessibility of square meter wages over half a year improved the most in Rzeszów and Lublin, influencing the results of an analysis that also took into account the cost of the loans.