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Stronger-Than-Expected Housing Loan Demand in March 2024

FINANCEStronger-Than-Expected Housing Loan Demand in March 2024

The value of inquiries for housing loans increased by 68.7% year-on-year in March 2024, according to the BIK Index of Demand for Housing Loans. The index value indicates that, on a working day basis in March 2024, banks and Credit Unions (SKOKs) sent inquiries to BIK for housing loans amounting to 68.7% higher than in March 2023.

In March 2024, 29.66 thousand potential borrowers applied for a housing loan compared to 22.22 thousand a year earlier, resulting in a year-on-year increase of 33.5%. Compared to February 2024, the number of people applying for a housing loan increased by 11.3%.

The average value of the requested housing loan in March 2024 was 430 thousand PLN, which was 15.3% higher than in March 2023, and slightly increased by 0.6% compared to February 2024.

Potential borrowers submitted loan applications in March 2024 for a value over 68% higher than the previous year.

“The demand for housing loans, as expected, slowed down after the end of the application period for the Safe Loan Program 2%. It is currently lower than in the second half of 2023, but still significantly higher (by 30-40%) than in the first half of last year. Despite concerns, it did not fall to the level before the program was launched. An important factor influencing the current reading of the Demand Index is the larger number of applicants, which increased from 22.22 thousand in March last year to 29.66 thousand in March this year. This over 33% increase in the number of applicants is largely due to the low base last year, ‘freezing’ of demand for housing loans in March last year, as a result of high interest rates and high inflation. Another important aspect determining the level of the Index is the increase in the average amount of the loan applied for to 430 thousand PLN – an amount over 15% higher than in March 2023. It is, however, lower by 1.2% than in December last year, also as a result of the lack of the support program for borrowers. Beneficiaries of the Safe Loan Program 2% applied for and took out loans for a higher average amount compared to ‘market’ borrowers. However, the real increase in wages with a stable level of interest rates positively affects the increase in creditworthiness, and consequently will allow for an increase in the average value of the loan applied for in the coming months of this year,” explains Prof. Waldemar Rogowski, Chief Analyst of the BIK Group, and adds:

“March data are better than forecasted, resulting from a smaller than anticipated negative impact of the end of the support program for borrowers on the number of people applying for a housing loan. Analyses at the beginning of the year indicated that the number of applicants would decrease by half, but the decrease is about 30%. Therefore, the demand for housing loans has not returned to the low level before the Safe Loan Program 2% was launched.”

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