Poland: How much housing purchase support will the Na Start loan prove to be
We do not yet know the final rules and date of entry of the new programme of subsidised loans for the purchase of the first flat, but the assumed limit on the income of beneficiaries and the prices of the properties purchased may limit access to it for a large group of potential buyers. To what extent can the new government programme repeat the success of its predecessor, the 2% Secure Loan?
Angelika Kliś, board member of Atal:
As a general rule, the more complicated the programme, the worse it will be. Already now, its potential beneficiaries have to analyse the detailed assumptions very carefully in order to get a good estimate of the potential benefits from the subsidies, and some issues still need to be clarified. Meanwhile, the ‘limiters’ built into the scheme will make it less successful. Introducing another parameter in the form of a limit on the price per square metre of a flat will further complicate matters, and may also - this depends on the rates adopted - make the programme unrealistic on the market and significantly narrow the group of its recipients.
By spreading the subsidies over a longer period of time, it can be assumed that the market will not react too rapidly in terms of demand. The situation will calm down and become more predictable, which is optimal for time-consuming property development investments.
Tomasz Kaleta, Director of the Sales Department, Develia S.A.:
Interest rates, and thus loan rates, are still at a high level. In this situation, some customers are waiting for the Mieszkanie na Start programme, which is supposed to be the successor of the 2 per cent Safe Loan, especially since, according to the initial assumptions, it provides for a significant subsidy for the largest families and expands the group of potential recipients. We believe that the income criterion proposed in the original legislation was a sufficient constraint on excessive demand and at the same time provided a guarantee that the programme would benefit those most in need. Limits on housing prices may introduce unnecessary market turbulence and lead to a situation where Mieszkanie na Start will not function in the largest cities, where real estate is most expensive.
For example, the 2 per cent Secure Loan, which was in force until recently and in which property price limits were set at PLN 700-800,000, inflated the prices of small, most sought-after units and practically excluded larger families looking for 3-4 room flats from participating in the programme. There was no developer offer at this price. If we look back in the past, we faced a similar situation in the case of the Mieszkanie dla Młodych programme. Its price limits for the largest cities were set too low, as a result of which only 5-10 per cent of the available flats in the cheapest locations could be bought with a MdM loan.
Zuzanna Należyta, Commercial Director at Eco Classic:
At the moment, the biggest housing problem and at the same time the price driver is the insufficient supply of flats. Every government programme so far has resulted in an increase in demand, and a sudden increase in demand with inelastic and insufficient supply leads to an increase in prices.
However, the new loan programme ‘For starters’ will not cause such a sudden increase in sales and thus price increases, because the number of contracts concluded under this programme is limited on a quarterly basis, and that is a good thing. I cannot say of any government programme to date that it has made sense and supported housing development.
For years, the development industry has been calling for the release of land that is held by the state, local authorities or SOEs. We call for reasonableness in the drawing up of development plans. We already know that new master plans being prepared are based on outdated or underestimated figures for the number of inhabitants in an area. Planners are relying on figures for the decline in births in Poland, but the fact that fewer of us are being born means that we will have to open up the labour market even further to foreigners, and that means increasing the size of cities.
It is advisable to limit so-called urban sprawl, but this is because it is cheaper to buy under the city or on the outskirts, so instead of limiting development areas, we need to increase the supply of land within city limits. The new programme will not help solve the problem of housing affordability, it will only be a little less damaging. What is needed is a long-term housing policy, and that includes cooperative housing, TBS, REITs or council housing. These are solutions for people who cannot afford credit and have too high an income for council housing. Moving these people to such a ‘market’ will relieve the burden on the commercial market and thus increase the availability of housing to buy or rent. What is needed is a system of tax concessions for the purchase of, for example, a first flat or a contribution to a cooperative, and holistic thinking rather than ‘topping up’ money.
Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction:
Any support for people in buying their own flat is a good step. However, it is worrying that despite the declaration that the new housing programme will come into force from July this year, we still do not know its specifics, final criteria and limits. Instead, there have been more recent announcements about changes to the terms of the initial assumptions, which are creating communication chaos and uncertainty, to the detriment of potential buyers. Customers are still wondering whether they can count on government support in the months ahead. Many do not know whether they will ultimately meet the programme's criteria. Neither does they know whether, as a result, they should start looking for a flat now. In the meantime, the attractive offer of flats is gradually shrinking and the prices of flats are rising. This situation does not serve either side.
Joanna Chojecka, Sales and Marketing Director for Warsaw and Wrocław at Robyg Group:
The housing market is extremely important for the whole economy and government programmes are a very important element to reduce the gap in the housing market in Poland. The government should make it as easy as possible for citizens to purchase their first flat. This is an essential element for a sense of security, supporting population growth and economic growth. Therefore, all programmes, including easily accessible and low-interest loans, should be a permanent element of support for citizens and government programmes.
The most important thing, however, is to speed up administrative procedures, which have become very lengthy in recent years. This makes it difficult for all developers to introduce new developments and thus affects the lower supply and availability of housing. Therefore, both state and local administrations should make procedures as easy as possible - so that construction can be carried out as efficiently as possible. This is an area that should certainly be improved, especially in the context of the introduction of further government programmes supporting the purchase of the first flat.
Andrzej Gutowski, Vice-President, Sales Department Director, Ronson Development:
It seems that the assumptions of the ‘Na Start’ programme are more well-thought-out than its predecessor. However, it is worth noting that the mechanism of the programme remains the same. Na Start is another programme that supports demand-side activities. The similarity to the situation in the real estate market related to the introduction of the 2% Secure Loan suggests that the new programme could be a stimulus for further price increases.
Damian Tomasik, CEO of Alter Investment:
Any programme that aims to help people buy their first home is a good idea in principle, but the details are crucial. The conditions for granting such support should be simple enough for everyone interested to be able to assess for themselves the possibility of benefiting from a given programme, as this is always an important factor, so often forgotten by legislators. The feasibility of such restrictions in the context of the market situation is also an important aspect, since, judging from past experience, this can severely restrict the possibility of buying a preferred property. Nevertheless, today we still have too little concrete information to comment on exactly what will be included in the final programme.
Marek Starzyński, Sales Director at Okam:
At this point, both developers and customers are waiting for the final shape of the programme. The preliminary assumptions of the Mieszkanie na start loan indicate preferential support conditions for families with many children, with a simultaneous age limit and lower limits on loan subsidies for singles. Some customers are indeed postponing their purchase plans in anticipation of the loan, but there is also a sizable group fearing that the dream M will disappear from the offer or its price will rise. What is certain is that any programmes aimed at supporting consumers when buying property have a strong stimulating effect on sales dynamics.
Source: dompress.pl
Photo: Orawska Vita, Develia
