Europe is building too little. The problem is greatest in richer countries

Europe is building too little.  The problem is greatest in richer countries

A massive housing crisis is just beginning on the continent, Bloomberg estimates. The number of building permits is decreasing and the prices of building materials are rising. A good signal for Poles who are planning to buy real estate but are willing to wait is the decreasing number of applications for subsidies under the “Safe 2% Loan” program.

We write regularly in Wprost about the skyrocketing real estate prices – how else can we describe the situation in which prices in Krakow have increased by 28% during the year, and in other provincial cities the increases are also double-digit. However, Bloomberg points out that the problem is pan-European. A massive housing crisis is just beginning on the continent, the agency estimates.

Real estate prices. This is a gigantic problem not only in Poland

Paradoxically, rich countries have the biggest problem. “This can be seen in the number of building permits. In Germany, this indicator dropped by over 27 percent in the first half of the year. In France, from the beginning of the year to July, the decline was 28%, and in the UK – 25%. The crisis also affects Sweden, where the scale of housing problems has been the highest since 1990. – calculates the website

This means that only a third of what is needed is being built to meet demand.

Rising prices of construction materials are also a brake on new investments. To illustrate the problem, Bloomberg cited the example of an electric car battery factory in Sweden that had to reduce employment. Reason: lack of housing for potential employees.

The insufficient number of apartments is not only a problem for families, but also hinders the development of industry.

Waldemar Buda assured that prices will not increase due to “Safe Credit”

The driving force behind the increase in real estate prices in Poland is the government subsidy for loans. Minister Waldemar Buda, responsible for their introduction, assured a few months ago that it is not possible for a program that will benefit a maximum of several dozen thousand people a year (the subsidy can only be obtained by a person who does not own any real estate; in the case of married couples, this condition must be met by both people), influenced market prices. It quickly turned out that he was wrong. Already in July, right after the program went into effect, prices began to rise rapidly. Effect: the average price of a square meter in Warsaw is already PLN 16,000. PLN, it’s not much cheaper in Krakow.

Business Insider Polska quotes experts’ opinions according to which, when the potential of the cheaper mortgage loan program ends, one of the important engines of price growth will go out.

– Many people were afraid that the launch of the cheap loan program would result in the offer being overbought and apartment prices increasing. To avoid this, Poles started buying apartments before the government program was launched. The result was that the offer was actually bought out and prices went up – comments Michał Sapota, owner of HRE Investment Trust, quoted by the website.

There are fewer and fewer applications for subsidies

Everything indicates that we are approaching a slowdown in purchases under government subsidies. – This may be indicated by the number of loan applications submitted – said expert Marek Wielgo.

He recalled that in July, when the government program was launched, almost 24.3 thousand people applied for a loan. households. In August, fewer of them applied, i.e. approx. 17.6 thousand. September brought some recovery, with over 21.8 thousand conclusions. We haven’t seen the October results yet, but in the middle of the month the Ministry of Development and Technology said there were almost 4.2 thousand. new applications. This suggests that their number may be even half as much as in September. This is regardless of the fact that initially only two banks participated in the program, in August there were nine of them, and now – 12.

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