BIK: The value of Polish home loan enquiries increased by 45.4% y/y in May

Banks and SKOKs sent to the Credit Information Bureau (BIK) enquiries for home loans in May for an amount 45.4% higher than a year earlier, the bureau reported. The number of applications rose by 20.6% y-o-y to 26,99 thousand, while on a monthly basis - it fell by 16.6%.

The average value of a housing loan applied for in May was. PLN 435.54k, up 14.8% y/y and up 0.7% month-on-month, it stated.

"Demand for home loans, as expected, slowed down after the end of applications under the “2% Safe Credit” scheme. It is now around 30-40% lower than in H2 2023, but it nevertheless remains significantly higher (by 30-40%) than in the first half of last year. Despite the concerns, it has therefore not fallen back to pre-Programme levels." said BIK Group chief analyst Waldemar Rogowski.

According to him, the more than 20% increase in the number of applicants compared to May last year is largely the effect of the then ‘freezing’ of demand for housing loans as a result of the high level of interest rates and the real fall in wages, so we have the effect of last year's low base, which is partly responsible for the May level of the Index. As he stressed, this effect will negatively affect the value of the Index in the following months.

"The second important aspect determining the level of the Index is the increase in the average amount of credit applied for to PLN 435,500 - an amount almost 15% higher than in May 2023. It is the highest on record. This is a result of property prices continuing to rise. Applying for increasingly higher loan amounts is supported by an increase in creditworthiness as a result of real wage growth at stable interest rates. However, the increase in demand for housing loans may be stimulated by the new borrower support programme. Its absence, on the other hand, will result in a stabilisation of the number of applicants at around twenty-something thousand people,’ added Rogowski.

Source: BIK and ISBnews