Is the housing loan subsidy programme necessary?
The government’s new support programme for homebuyers raises questions about its necessity and effectiveness. Would investing in municipal and social housing be a better approach, or is there an alternative solution for Poland’s housing market?
Mateusz Bromboszcz, Vice-President of the Management Board of Atal
One of the key reasons for the slowdown in the housing market is not the lack of this or that government programme, but above all the record high cost of financing a purchase compared to other EU countries. This is an obstacle for some customers, and the industry has been forced to operate in this unfavourable environment for a long time. The development of housing is also not favoured by supply-side phenomena, including the high cost of land and its deficit in large cities, as well as the long time it takes for the administration to process investments.
An additional factor negatively affecting the housing market is the bureaucracy and the multitude of administrative procedures related to housing construction. This has a direct impact on prices, because the longer and more complicated the process of obtaining the necessary approvals, the more expensive the apartments are.
Zuzanna Należyta, Commercial Director at Eco Classic
The state should not interfere in the free market in any way. As the introduction of the BK2% programme has shown, with increased demand and low supply, housing prices have risen. For a year now, we have been promised the introduction of a new programme, and as a result, developers have increased the number of investments launched, which, combined with the current level of interest rates, has caused the current stagnation.
The constant assurances about planned programmes are having a destructive effect on the market. A new programme will not help solve the problem of housing availability. What is needed is the creation of a long-term housing policy, and this also includes cooperative housing, social housing associations, REITs and council housing. These are solutions for people who cannot afford a loan and whose income is too high for council housing. A system of tax breaks is needed, for example, for the purchase of a first home or for contributions to a housing association. A holistic approach, rather than just throwing money at the problem, can bring good results.
Tomasz Kaleta, Managing Director of Sales and Marketing at Develia
Over the past year, there has been a lot of confusion and ambiguity surrounding the government's housing support programme. Initially, it was supposed to support the purchase of a flat by subsidising the loan, but the project proposed by the Ministry of Development and Technology is different from the original assumptions. I am afraid that in its current form it may not improve the housing situation of Poles, which is far from Western European standards.
Expanding the stock of municipal and social housing is an important element of the state's housing policy, but it is no substitute for measures to support people who want to buy their own home. It is crucial to develop solutions that will contribute to the long-term development of the housing market in Poland.
Anita Makowska, Senior Business Analyst at Archicom
The Key to Housing programme raises many questions, both about the mode of its introduction and about the real needs of the market. The long-term work on the programme's shape and the lack of transparency in this process caused a significant stagnation in transactions, holding back the purchasing decisions of potential property buyers. Today, with the market partially stabilised, the initiative itself does not seem to fully address the key challenges of the housing market. Focusing support exclusively on the secondary market excludes developers, thus limiting the new supply of housing and failing to stimulate the economy. Price caps in large cities limit housing availability, and eligible individuals can often only buy properties that require renovation.
Price caps severely limit the availability of housing in larger cities, and the focus on loan subsidies does not help people who cannot access this source of financing. In theory, a more effective solution would be to direct funds to social and municipal housing, especially since the government has announced a significant increase in spending in this area. In the long term, a viable response to the market's problems would be systemic support, e.g. through subsidies for down payments, the development of social housing rental, or support for housing investments. Such programmes should be a permanent element of housing policy, not ad hoc measures. Only then will they have a real impact on improving housing availability.
Mariusz Gajżewski, Head of Sales, Marketing and Communication BPI Real Estate Poland
Any stable and predictable support for homebuyers has a positive impact on the market, but uncertainty about the details and timing of the introduction of a new programme does indeed make people cautious about making purchasing decisions. The key is to find a balance between subsidies and long-term investments in social and municipal housing. Investments in these segments are important, but they do not replace the need for support for people who want to buy their own homes. A stable regulatory environment and consistent housing policy could stimulate the market more effectively and increase the availability of housing.
Andrzej Gutowski, Sales Director at Ronson Development
The overall assessment of the measures taken is a complex issue. As far as the very process of introducing the new programme is concerned, the lack of detailed information and the fragmentary announcements regarding the final shape of the programme have a negative impact on the market situation. On the other hand, the programme does not solve all problems, especially when it comes to the health of the market, which largely depends on interest rates.
We believe that such support programmes would have to be combined with the development of the social housing sector. It is worth considering the possibility of acting through REITs, which could stimulate the real estate market in the long term. However, we believe that the above solutions must be part of more intensive measures for the real estate market. Without a broad strategy including, among others, streamlining the processes of obtaining building permits, freeing up land for new investments, or investing in municipal construction itself, it is difficult to count on a significant improvement in the situation on the housing market in Poland.
Eyal Keltsh, CEO of Robyg and Vantage
In Poland, due to rising property prices and high mortgage costs, subsidy programmes can indeed play a stabilising role and help people in more difficult financial situations. However, it is worth considering whether there are not more sustainable methods that could influence the long-term development of the housing market without creating a dependency on subsidies.
Investments in municipal and social housing can be a good solution, especially in the context of ensuring the long-term availability of housing. This type of construction can fill a gap in the market by providing housing for people who are unable to purchase on the commercial market. Involving private sector companies exclusively in the construction of projects, while maintaining control over rental or sales prices, can benefit both lower-income people and the economy.
Recent government statements indicate that more funds are planned for social housing. This is a step in the right direction and can help to solve the problem of housing availability. However, it is important that these funds are spent in an effective and well-considered manner, taking into account the real social and demographic needs. Instead of focusing solely on subsidies, it is worth considering broader solutions, such as a tax reform in the real estate sector, which could encourage investment in long-term rental.
Instead of subsidies for purchases, the focus could be on increasing the availability of rental apartments, which could lead to greater flexibility in the market. Support programmes for home buyers may have their place, especially in the context of high property prices, but it is necessary to plan them properly so that they do not cause side effects, such as holding back purchase decisions.
Source: dompress.pl
Photo: PianoForte by BPI
