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Surge in Housing Loan Inquiries in Poland: A 45.4% Increase in May 2024

FINANCESurge in Housing Loan Inquiries in Poland: A 45.4% Increase in May 2024

In May 2024, the value of housing loan inquiries increased by 45.4% year-on-year, according to the BIK Housing Loan Demand Index. This indicates that banks and credit unions sent inquiries to BIK for housing loans amounting to 45.4% more than in May 2023.

In May 2024, 26.99 thousand potential borrowers applied for housing loans, compared to 22.37 thousand a year earlier, representing a year-on-year increase of 20.6%. However, compared to April 2024, the number of applicants decreased by 16.6%.

The average value of the requested housing loan in May 2024 was PLN 435.54 thousand, an increase of 14.8% compared to May 2023, and a slight increase of 0.7% compared to April 2024.

“The demand for housing loans has slowed down as expected after the conclusion of the Safe Loan 2% Program applications. Currently, it is about 30-40% lower than in the second half of 2023, but it remains significantly higher (by 30-40%) than in the first half of last year. Despite concerns, it has not fallen to pre-program levels. A significant factor affecting the current value of the Demand Index is the number of applicants, which increased from 22.37 thousand in May last year to 26.99 thousand this May. This over 20% increase compared to May last year is largely due to the ‘freezing’ of housing loan demand last year due to high interest rates and real wage declines, resulting in a low base effect. This effect will negatively impact the Index value in the coming months. Moreover, compared to the previous month, the number of housing loan applicants decreased by 16.6% in May,” explains Dr. Waldemar Rogowski, Chief Analyst of the BIK Group.

“Another important aspect determining the Index level is the increase in the average loan amount to PLN 435.5 thousand, nearly 15% higher than in May 2023, and the highest in history. This is due to the still rising property prices. The increase in loan amounts is facilitated by the rise in creditworthiness resulting from real wage growth with stable interest rates. However, the demand for housing loans may be stimulated by a new borrower support program. Its absence, however, would stabilize the number of applicants at around twenty-something thousand,” adds Prof. Rogowski.

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