After many months of uncertainty regarding the “Housing Start” program, also known as the “0% Loan,” it is now confirmed that the project will not proceed. The government has announced an alternative housing support program, but its details remain unclear. We explored how this development might affect the real estate market in the coming months and what the development industry and potential buyers think.
Continued normalization in the housing market?
Recent months in the housing market have been characterized by stabilization and a gradual expansion and diversification of offerings. After the challenging market conditions brought on by the “Safe Loan 2%” program, the rise in prices has somewhat slowed, and potential buyers once again have more options to choose from. There has also been a noticeable increase in interest in mortgage loans. Experts have been emphasizing for weeks that the stabilization of prices per square meter will continue into the early part of the new year, although this was heavily dependent on the final fate of the government program, which remained uncertain for a long time.
What will replace the “0% Loan”?
Initially scheduled to launch in July, then postponed to autumn, and later moved to early 2025, it was finally announced in December 2024 by Development Minister Krzysztof Paszyk that the “0% Loan” would not be implemented. The Minister also noted that the government is working on a new form of housing support. The specifics of this proposal are not yet known, but details are expected to be released within the first quarter.
Adding to the Minister’s statement, on December 13, 2024, the spokesperson for the ministry announced that the final premises of the new plan would depend on reaching an agreement within the ruling coalition, which so far is deeply divided on housing policy. It was also noted that the strategy would change and this time would utilize instruments that have been successful in earlier, well-regarded programs. To develop a clear vision of what could be real support for Poles planning to buy their own home, the government needs to “catch up.” It is known, however, that 4.2 billion PLN has been allocated for housing purposes in the 2025 budget.
Searching for good solutions
Minister Paszyk emphasized that preparing the new program requires a lot of work, due to the fact that the initiatives of the previous government were ill-conceived, chaotic, underdeveloped, and had opposite effects than intended. The “Safe Loan 2%” was supposed to increase housing availability and lead to price reductions, but the opposite happened. For the new program to be a real help to those who need it and not to disturb the market again, it requires a comprehensive approach, considering many different factors that were not taken into account in the previous initiative, and especially proper regulations, including price limits. The housing policy definitely needs optimization, comments Tomasz Stoga, Vice President of the Polish Association of Development Companies, President of PROFIT Development.
Urgent needs in the housing sector
What do buyers think? Their skepticism towards government support programs has been growing in recent months, as they have been waiting too long. Many people no longer count on government help, which is evident in the resurgence in the market over the past few months. It seems that this revival might continue for the near future.
Industry representatives emphasize that if housing policy is to be effective, it must not stop only at selecting a support program. A comprehensive approach is essential. What the market really needs today to balance supply and demand, and thus stabilize prices, is the release of state-owned lands, which remain “frozen,” while those from private owners are becoming more expensive. Another issue is the protracted administrative procedures and unpredictability of decisions. A dialogue between industry representatives and the government is necessary, both regarding the support program and the above issues, adds the President of PROFIT Development.
Time will tell what solution the government will propose and whether the project will indeed appear in the coming months.