How many average salaries do you need to build a house?
A few months ago I calculated how many average national salaries are needed to build a house today. I then came to an interesting conclusion – a square meter of a single-family house costs approximately the same as the net national average. Several months have passed since then, but the proportions have not changed, reports Wojciech Rynkowski from Extradom.pl.
Safe Loan 2% resulted in a new real estate price on the market in the amount of PLN 800,000. zloty. This is the loan limit available to a couple with a child or a married couple. Sellers quickly picked up on it and many properties last year were priced slightly below this threshold. Due to the high cost of a square meter of housing in large cities, building a single-family house has become an even more attractive alternative, and the determinant of PLN 800,000. PLN began to function here as well. The Extradom.pl expert checked what the loan market in Poland looks like today and how much you need to earn to build a house.
How many average salaries do you need to build a house?
– A few months ago I calculated how many average national salaries are needed to build a house today. I then came to an interesting conclusion – a square meter of a single-family house costs approximately the same as the net national average. Several months have passed since then, but the proportions have not changed. Poles are currently most likely to build houses with an area of 80 to 110 m², so it should be assumed that the need is from 80 to 110 average salaries – PLN 450,000 to PLN 620,000. zloty. Of course, these costs vary between regions, as does the purchasing power of their inhabitants. To this amount we should also add the purchase of the plot and the subsequent finishing of the house, which will give us a sum of PLN 800,000. up to PLN 1 million – says Wojciech Rynkowski, expert from Extradom.pl.
So how much do you have to earn to be able to borrow PLN 640,000 from a bank? PLN – assuming that we have 20% (PLN 160,000) of own contribution? Online loan comparison websites estimate the mortgage installment for 25 years at PLN 4,000. zloty. This means that in the case of a married couple with one child, without other loans, you need to earn about PLN 10,000 – 11,000 net per month to be able to take out a loan of this amount and repay it without a significant drop in your standard of living.
The installments will decrease when the Monetary Policy Council lowers interest rates
4 thousand PLN to repay monthly installments is a lot – for a couple raising children, whose earnings are close to the average salary (just over PLN 8,000 gross, but the Central Statistical Office draws data only on the basis of earnings in large private companies) this may be unbearable. Extradom.pl adds that such families can be helped by the government's subsidy program, which will be launched in the coming months. We do not yet know all the provisions of the “Mieszkania na Start” program, but everything indicates that the income criterion will be applied. Thus, a family with one child will be able to earn a maximum of PLN 23,000, and a family with two children – PLN 28,000 gross. By setting such income thresholds, the project authors assumed that those earning more would be able to afford a mortgage loan on commercial terms, without using state aid.
However, the stick has two ends. The program will help some, but others will make it difficult. The previous “Safe Credit” subsidy program increased real estate prices, as a result of which those entitled to benefits benefited, and everyone else had to dig deeper into their pockets (or, less graphically, take out a loan for a higher amount – and without any state aid).
At the same time, you must be aware that in the future – maybe at the end of this year, or maybe at the beginning of the next one – loan installments will decrease due to lower interest rates. When the Monetary Policy Council began to raise rates in 2021 to slow down inflation, installments increased from month to month. The cycle of increases lasted for 9 months, then they were kept at the same level for the next few months. In 2023, the Monetary Policy Council decided to make slight reductions, but the reference rate is still 5.75%. Before the first increase, it was at the symbolic level of 0.10%. Reducing it even by half compared to the current situation will in itself bring a reduction in loan installments for all those in debt.
