Housing price increases inevitable? The reason is a government program

Poles rushed for a 2 percent loan.  There are the latest data

The value of the real estate price index in Poland increased by 0.07 points in July and amounted to 108.04 points. Experts predict that the second half of this year will be marked by rising housing prices. This is the effect of, among others, supply that cannot keep up with the artificially growing demand generated by the “Safe Credit 2%” program.

The urban.one index for residential premises in Poland, prepared for Bankier.pl and “Puls Biznesu” by Cenatorium, amounted to 108.04 points in July. This means an increase of 0.07 points compared to June. Due to the declines in the previous three months, there was a decline of 3.17 points on an annual basis. July was a very important month for the housing market, as the “Safe Credit 2%” program was launched at the beginning of this month.

Will apartment prices increase due to the “2% Safe Credit”?

According to real estate market experts, rising prices, just like in the first quarter of this year and, above all, in the second quarter of this year. will accompany those looking for their own “M” also in the second half of this year. This is the effect of, among others, supply that cannot keep up with the artificially growing demand generated by the government program. This is indicated in an interview with Bankier.pl by Michał Kubicki, expert of the Real Estate Committee of the National Chamber of Commerce and president of Omega Asset Management.

– This will result in two fundamentally bad situations on the market. Firstly – a dynamic increase in prices of apartments eligible for the “Safe 2% loan” program. Secondly, a shift in part of the demand from 2024, due to fear of rising prices and exhaustion of the pool of funds – says Kubicki. – This may cause a demand hole in the middle of next year or even earlier – he adds.

Data from the Credit Information Bureau quoted by the portal show that 43.47 thousand people applied for a housing loan in July. potential borrowers. That’s 208.3 percent. more than in the same month last year. In August, the number of applications amounted to 38.87 thousand, which meant an increase by 213.8 thousand. on an annual basis.

The campaign is not conducive to stabilization

Michał Kubicki points out that the current period, i.e. the end of the election campaign, is not conducive to stabilization on the housing market. – Bidding on increasingly extreme ideas for voters’ access to housing brings increased expectations regarding the offer of cheap loans. With a drastic increase in the budget deficit, such actions resemble Chinese banks adding money to the market, where the construction market accounts for almost 25%. share in China’s GDP – explains the expert.

– Overheating of the economic situation now results in the threat of bankruptcy for the leading local development companies, whose total debt exceeds USD 4 trillion. This is how artificial stimulation of demand ends. It is worth taking advantage of the Chinese lesson so as not to make the same mistakes and cause a meltdown – he adds.

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