BIK: Polish home loan enquiries up 255.4% y/y in November

Banks and SKOKs sent requests for home loans to the Credit Information Bureau (BIK) in November for an amount 255.4% higher than a year earlier, the bureau said. The number of applications increased by 193% y-o-y to 39.83 thousand, while on a monthly basis - it fell by 3.7%.

The average value of a home loan applied for in November this year was PLN 429.74k (the highest ever), 27.4% higher than in November 2022. Compared to October 2023, it increased by 2.1%, it stated.

"Demand for home loans continues to be very high. Potential borrowers submitted loan applications in November this year for a value as much as two and a half times higher than a year ago. The level of the Demand Index is still at historically high levels. There are several reasons for this high value of the current Demand Index reading. The first is the higher number of people applying for a home loan, which has increased from around 14,000 in November last year to almost 40,000 in November this year. This is largely a result of interest in the '2% Credit' scheme. Of those applying for a home loan in November this year, around 55% of people are potential beneficiaries of the scheme," commented BIK Group chief analyst Waldemar Rogowski.

Demand for housing loans is also growing among potential borrowers who, for formal reasons, cannot be beneficiaries of the programme. They are favoured by an increase in creditworthiness as a result of real wage growth, he added. He pointed out that the level of creditworthiness is constrained by an increase in the WIBOR rate of around 0.2 percentage points and rising property prices. As a consequence, the market availability of housing credit is currently higher for the beneficiaries of the 'Credit 2%' programme.

"In interpreting such a currently high Index reading, one must also take into account the relatively low interest in home loans in November 2022, resulting in a low comparative base for November this year," explained BIK Group's chief analyst.

"An important factor determining the level of the Index is also the increase in the average amount of credit applied for to a record high of almost PLN 430,000 - an amount as much as over one-quarter higher than in November 2022. Such a high value of the average amount applied for is due to both the increase in property prices and the fact that a large proportion of people wishing to take advantage of the '2% Loan' programme are applying for amounts close to the upper limit of this programme (PLN 500,000 for singles and PLN 600,000 for married couples)," Rogowski added.

Source: BIK and ISBnews