Poland's mortgage market summary.


The year 2020 is over, and even though its outcome will most probably affect the market for longer, let's summarize what we already know.



1. Amount of credit granted in 2020.



As per data from the Credit Information Bureau (BIK), after the freeze due to lockdown, the market rebounded during the rest of the year, and the total value of mortgages granted was only 2,9% less than in record-breaking 2019. At the same time, BIK predicts the value to grow, in comparison to 2020, 13,9% this year, which would mean around 72 billion PLN of mortgage granted, another all-time high. The contraction in 2020 was stronger when it comes to cash loans (-30%) and leasing (-10,1%).


At the same time, the quality of the portfolio of existing mortgages improved last year. The percentage of mortgages unpaid for longer than 90 days, went down by 0,29%, reaching 0,5% of the total portfolio.


2. Banks loosen their policies.



As the economic impact of COVID-19 was less harsh than expected, banks adjusted to it and started to liberalize their policies gradually to accommodate high demand. The required upfront went down through the market, for example, ING went back from 30% to 20%, Pekao S.A. from 15% to 10%. Also, new promotional offers start to show up on the market and it seems like we are heading closer to pre-lockdown reality.


However, banks still take the COVID-19 economical impact into account and remain strict towards customers who work in sectors directly affected by the lockdown. On top of that, obtaining a loan became generally harder for business owners than it was before.


3. The interest rate in Poland.



The reference interest rate remains 0,1% after a sudden cut-down by the Monetary Policy Council between March and May 2020. At the moment the market consensus expects the rate to remain untouched until the end of 2022. However, the President of the National Bank of Poland, Adam Głapiński, in an interview last December, announced the rate might be lowered even more and below zero if needed, but the experts consider this unlikely.


The current level of the interest rate is useful for the MPC and NBP for many reasons, however, given the Polish inflation is currently highest in European Union, should it go out of control, the rate might be raised faster than predicted. Please keep it in mind when planning on the mortgage, as it is based on a 15-30 years perspective and the reference interest rate shapes the amount of your monthly payment.


4. Property prices.



In July 2020, most of the market analysts were predicting prices to fall. However, the mix of a low interest rate and high inflation resulted in a mass closure of the bank deposits (53 billion PLN from March until August 2020), of which a significant amount went to the property market, which together with a stable amount of mortgages granted defied earlier predictions.


Based on Eurostat data for Q3 of 2020, the price per square meter went 7,9% higher when compared to Q4 of 2019, or +10,6% for second-hand properties, and +4,2% for newly built ones. At the same time, Eurostat calculated that since 2015, prices grew a total of 37% (+47% for second-hand and +25% for newly built), which still is less than other countries in the region, like the Czech Republic (+55%) or Hungary (+80%).


The newest data we have is from the National Bank of Poland, regarding the Q4 of 2020 and the second-hand market. NBP analyzed 7 biggest property markets in Poland and based on their research the transactional prices in comparison to Q4 of 2019 grew: 6,1% in Gdańsk, 7,1% in Gdynia, 9,5% in Kraków, 13,4% in Łódź, 2,2% in Poznań, 2,7% in Warsaw, and 9% in Wrocław. Moreover, the NBP report suggests that the difference between the offering price and the transactional price is growing, especially in Warsaw (respectively on average: 11893 PLN per m2 offering and 10072 transactional) and Kraków (9820 and 8118). Please keep that in mind when negotiating with the seller.



Best regards,

Loan-brokers.pl Team



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