Poland: Are flat buyers waiting for a preferential loan?

How large is the group of people who are planning to buy a flat, but are holding back their decision because they are waiting for government subsidies under the Na start programme? What impact does this have on sales performance? Are developers recording an increase in the number of bookings? Is the number of cash buyers increasing? Does the postponement of the programme's start go hand in hand with changes to the construction start dates of new projects?

Tomasz Kaleta, managing director of sales and marketing at Develia:
We estimate that around 10-15 per cent of customers are indeed waiting for the introduction of the ‘Start-up Loan’ programme. However, I would not overestimate its impact on the housing sector. The government support, as in the case of the ‘2% Secure Loan’, will only be available to a specific group of first-time home buyers. In addition, the new borrower support programme introduces income limits that did not previously apply. Currently, roughly half of flats are purchased with cash and the remainder on credit, both by people buying their first flat, who will potentially be able to benefit from government support, and by customers who decide to buy another, often larger, unit.

As one of the largest residential developers in Poland, we analyse the announcements of government programmes and take into account their potential impact on the market. However, we do not plan our offerings under them, as it takes about two years on average to prepare an investment, while the duration of government programmes, as the example of the ‘2% Safe Loan’ shows, can take several months.

Nevertheless, we are waiting for a clear declaration from the government as to when the ‘Start-up Loan’ will be launched, which would certainly have a stabilising effect on the industry. Currently, despite a weaker second quarter of this year and a not entirely favourable market situation, we are seeing an increase in customer interest. This is in line with the trend of previous years, when with the start of the holidays there are more contacts and bookings themselves.

In my opinion, the real estate industry is waiting more for a reduction in interest rates than for the start of the government programme, which would increase purchasing capacity and lower the cost of loans.

Agnieszka Majkusiak, sales director of Atal:
As a leading developer with a wide range of flats, we have various groups of customers, and potential beneficiaries of the subsidy programme are only one of them. Therefore, it is difficult to estimate precisely how numerous this specific group is, especially as the exact principles of support are still not known. Certainly, due to the political turmoil and the delay in the implementation of the rules, some customers are holding back their purchase. We have prepared a proprietary programme for them called ‘Decision by instalments’, which allows them to book a flat with a price guarantee and possibly withdraw from the contract by the end of March. This has resulted in an increasing number of bookings under such a scheme, although the market generally slowed down during the holiday season.

We are also flexible about payment schedules for other customers who, due to interest rates, prefer to defer current payments to a more advanced stage of construction. We have a pool of flats with payments on a 15/85 per cent or 10/90 per cent basis, and an increasing proportion of transactions are with cash customers who prefer an individual form of schedule and are systematically accumulating funds for deposits.

As interest rates on commercial mortgages in Poland are now at one of the highest levels in Europe, the creditworthiness of potential buyers is often lower than they assumed at the beginning of their search for their own ‘M’. Some clients are counting on reductions in the price of flats, or actually following press publications indicating a decrease in their growth dynamics, which stops them from making a decision. Meanwhile, the costs of land purchase and development do not give developers much room to reduce prices.

Our strategic long-term goal is to maintain an attractive and diversified offer of flats on the largest residential markets in Poland. Therefore, we are acting in line with our investment plans and construction schedules.

Damian Tomasik, CEO of Alter Investment:
Announcing government programmes, such as ‘Na start’, without a defined schedule and postponing their introduction dates, creates significant uncertainty in the market. Customers are delaying their purchase decisions in anticipation of the subsidies, which negatively affects the current sales of flats. We are seeing an increase in the number of bookings, but the lack of stability and unclear conditions and dates for the introduction of the scheme lead to stagnation and make planning difficult, both for buyers and developers. An increase in the number of cash transactions can be seen in the structure of sales, which is partly a response to the instability in the availability of soft loans.

In setting up government programmes, it is crucial to develop a long-term and stable support plan that is predictable for all market participants. Government initiatives can play an important role in increasing the availability of housing, currently the best support for buyers is to ensure an adequate supply of land and to simplify administrative procedures. An example of a market that benefits from these two factors is Łódź, where, thanks to an abundant supply of property and predictable prices, buyers can make an informed choice.

Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction:
We do not have exact estimates here, but in fact in our sales offices one could strongly feel the holding back of purchase decisions until the new loan programme is launched. With these customers in mind, we have launched a pilot programme in the ‘Apartamenty na Wzgórzach’ development near Myślenice, where we offer rental flats with a pre-emptive purchase option after the introduction of the announced #naStart loan.

The delays in the introduction of the new borrower support programme have not affected the timing of our developments, and we have not combined the two themes. As far as cash customers are concerned, we have a rather steady interest here, although investment purchase activity tends to increase in the last quarter of the year due to tax time approaching at that time and the desire to optimise tax.

Shraga Weisman, CEO of Aurec Home:
We are progressing all investments as planned. The changes to the ‘Mieszkanie na start’ programme do not affect the construction and delivery dates of units to buyers. Since the beginning of the year, we have noticed an increased number of enquiries and bookings of units meeting the criteria of the government subsidy in our sales office, and this number is growing from month to month.

It is difficult to say whether the bookings are made by people hoping for a cheap loan or rather by those who fear a repeat of last year and want to buy in time before the next market turbulence. Without a doubt, the preferential loan will benefit the most large families of 2+3, who, according to the assumptions, can own real estate, which will enable them, for example, to sell their current flat and buy a larger one. This group will receive the highest subsidised loan limits.

Marek Starzyński, Sales Director, Okam Capital:
Currently, the majority of customers are holding back their decision to buy a flat, which is due to several factors. Among them are, first of all, waiting for the subsidy from the ‘Mieszkanie na start’ programme, the assumptions of which are not yet known, as well as reductions in housing prices. High interest rates on loans are also not without significance.

Some people considering the purchase of a flat in certain local markets analyse and compare the available offers due to the large number of investments under construction. Recently, we have seen an increase in interest in flats in the Inspire project in Katowice. Flats in the Cityflow project in Warsaw are invariably in demand; at the moment the units are not within the assumed programme limits.

We have not seen a significant increase in cash purchases of flats in any of the ongoing developments recently. At the same time, the postponement of the introduction of ‘Housing to Start’ does not affect our projects, which are being carried out according to the adopted schedule. We will soon deliver the first phase of the Progress Zone and Cityflow, and we are developing their second phases. We are also continuing work around the lofts in the Warzelnia by Bohema building in the capital, as well as the final stage of Inspire in Katowice.

Andrzej Gutowski, vice-president, director of the Sales Department at Ronson Development:
We are noticing that more and more customers are giving up waiting for the ‘Na Start’ programme and choosing to buy a flat without the support of government loan subsidies. Since the beginning of 2024, we have seen stable interest in our sales offices from both credit and cash customers.

The postponement of the entry date of preferential lending has not affected our plans for the start dates of new projects. We already assumed at the beginning of the year that the ‘Na Start’ programme might not be implemented in full, so we are consistently meeting our targets. We are focusing on a smooth introduction of new developments, an appropriate level of pre-sales and pre-sales. At the same time keeping a close eye on our annual liquidity targets.

Source: dompress.pl
Photo: Miasteczko Jutrzenki, Aurec Home