Coalition Tensions Await. Price Limit? “This Smells Like Communism”

According to the assumptions of the Ministry of Development and Technology, the housing loan subsidy program would start next year and cost over PLN 1.15 billion. The program is announced to last for years: the Ministry of Development and Technology convinces that thanks to this, the situation from 2023 will not be repeated, when Poles rushed to banks for a “Safe 2% loan” because they felt that the money would only be available for a few months. As a result, housing prices in all regions went up dramatically, because a large group of customers “jumped” to buy in a short time.

Another thing is that “BK2” was also supposed to last for several years. It didn’t work out, the market was deregulated.

“Start-up loan” has more opponents than supporters

Politicians from parties that oppose the new government program “Kredyt na start” are afraid of such progressive deregulation. It is supposed to be ready by autumn at the latest, but yesterday the media received information that the Economic Committee of the Council of Ministers will deal with the bill next week. We have written many times that this is a project that does not have the support of even the coalition partners. The Left and Poland 2050 are against it, believing that contrary to what the Ministry of Agriculture and Rural Development assures, the program does not have any “safety devices” that will protect it from repeating the mistakes of last year’s subsidy program.

Szymon Hołownia’s party has its own idea of ​​what the state’s participation in the real estate market should look like: cheap construction with the possibility of gaining ownership after a longer rental period (and at a commercial price), it also demands that PLN 50 billion be allocated for social housing by 2030. MRiT assures that it wants to add something to social housing and will also present an appropriate act soon.

0% loan with price limit?

One of the criticisms leveled at “BK2” was the lack of a maximum price for a property that could be purchased with government support. As a result, sellers – both on the primary and secondary markets – were pushing up the price because they knew that someone would buy the apartment sooner or later. Even if the starting price is higher than it was a few months earlier, when it is softened by subsidies, it is somehow easier to swallow the increase.

However, the price limit proposal – considered by the previous MRiT management – ​​does not convince Polska 2050.

– The limits smell of communism. You can’t regulate prices for everything, public policy should serve the availability of housing, and not generate a problem that then has to be solved by manual price regulation – said the Minister of Funds Katarzyna Pełczyńska-Nałęcz, who has been vocally critical of the government project.

Market on hold

We still have at least a few weeks of political arguments and jostling ahead of us about whether to introduce the “Start Credit” and on what terms. The Civic Coalition’s persistence is surprising, because although it has known since spring that it will not find supporters for its project, it stubbornly pushes it forward anyway. “Never say never,” so maybe at the price of some concessions in other matters, one or another coalition partner will vote “for,” but this could be a very high price. Besides, in the second quarter of this year it seemed that the government had quietly withdrawn from the idea of ​​subsidies, because nothing was said about it for several months. Out of the blue, Krzysztof Paszyk, who replaced Krzysztof Hetman as minister after the European elections, declared that nothing had changed, work was ongoing.

The market remains in a kind of limbo in this situation. Sellers do not know whether to put apartments on the market, buyers who have a chance to get a subsidy (and whether they meet the criteria can be assessed only through the prism of media reports, because there is no draft law), postpone the purchase until next month, quarter, maybe year. Such uncertainty is never good for the entities involved, but it helps the market to regulate itself.

What’s happening in the real estate market?

Prices are falling. Not spectacularly, but after months of increases, it is a visible change. In 10 of the 17 cities surveyed by Expander and Rentier.io, prices fell, most notably in Toruń (-7.5%). Other cities where prices fell include Gdańsk (-3.1%), Rzeszów (-3.1%), Łódź (-2%), Białystok (-2%), Sosnowiec (-1.3%), Szczecin (-1.2%), Gdynia (-1%), Poznań (-0.8%) and Warsaw (-0.1%).

According to data from Otodom Analytics, in July 2024, fewer than 3,000 apartments were sold on the seven largest primary markets – the least since January 2023. Compared to June, sales fell by around 3%. The comparison with June 2023, when demand was boosted overnight by the “Safe Credit 2%” subsidy program, is impressive: here, the drop was as much as 40%.

This is evident in the sale of loans. According to data from the Credit Information Bureau, 14.6 thousand mortgage loans were granted in June – 3.3 percent less than in May. Although this is almost 1/3 more than in the same month of 2023, at the same time, compared to the best in this respect January 2024, when there was a peak in contracts signed under the “Safe 2 percent credit”, there were 41 percent fewer loan agreements. We write more about the situation on the real estate market in the text below.