The creditworthiness of average-earning Poles is falling. How much will banks lend them?

The analysis assumes that the average earning 30-year-old single person is one whose net salary, i.e. take-home pay, is PLN 6,000. In the case of a childless 30-year-old couple, we take into account earnings of PLN 8,000, and a married couple aged 35 with a child – PLN 10,000. Importantly, the young people have an employment contract for an indefinite period. Having previously lived with their parents, they managed to save up their own contribution to cover 20% of the costs of buying a flat. They also do not have any credit obligations that would reduce their creditworthiness.

Another month of stagnation on the credit market

– June was another month of stagnation on the mortgage market. In the case of average-earning singles and childless couples, the decline in their creditworthiness may be a cause for concern – says Konrad Pluciński, an expert from the loan comparison website Rankomat.pl, who analyzed the offers of the 10 largest banks.

In June, a single person could count on an average of PLN 379.2 thousand in a loan to buy a flat (1% less than in May), a childless couple – PLN 472.2 thousand (also 1% less), and a couple with a child – PLN 573.7 thousand (unchanged). In June, Rankomat.pl noted stricter creditworthiness assessment criteria in five banks: PKO BP, ING, Alior Bank, Santander Bank Polska and BNP Paribas. In Bank Ochrony Środowiska (BOŚ) and Pekao SA, the situation did not change, while Bank Millennium, Credit Agricole and Velo Bank turned on the credit tap by offering higher amounts of housing loans.

However, it is worth noting the huge differences in the way individual banks calculate their creditworthiness. For example, in the case of a three-person household with a net income of PLN 10,000, the difference between the first and last bank in the ranking was PLN 217,000 in June. The problem is that the banks offering the largest amounts are not always the cheapest, which is why proper market research and selection of the right offer are very important.

Prices of new apartments

The good news, however, is that – according to data from the BIG DATA RynekPierwotny.pl analytical platform – the offer of apartments also increased slightly in June in most metropolises (the exceptions were the Tri-City and the Upper Silesian-Zagłębie Metropolis), because there were more apartments introduced to the market than sold.

The growing competition has forced some companies to reduce prices, e.g. in the form of discounts of a few percent or freebies such as a storage room or a garage space. It should be noted that promotions mainly apply to apartments in less popular locations and the last apartments in completed investments. Some companies also offer a deferred payment system, which means that the buyer can pay 80 percent or even 90 percent of the apartment price only upon its receipt. For those who use a loan, this means a real benefit. They do not have to use the entire loan amount at the time of purchase and pay interest on the entire amount. Developers are aware that many potential buyers are hesitant to make a purchase decision due to the high interest rates on mortgage loans.

– We are particularly pleased that developers have started to introduce more apartments in the popular segment to the market, which has stopped the increase in the average price per square meter – says Marek Wielgo, an expert from the RynekPierwotny.pl portal.

What does it actually mean that housing prices are rising?

According to BIG DATA RynekPierwotny.pl, in Krakow and the Tri-City the average maintained the level from May, while in Poznań it dropped by 1%. However, the situation on the housing markets is still very dynamic. On a monthly basis, the average price per square meter may increase if a pool of expensive – for a given market – apartments enter the market. In June, examples of this are Warsaw, Wrocław and cities that are part of the Upper Silesian-Zagłębie Metropolis. There was a 1% increase in the average price per square meter of apartments available in the offer of developer companies. It is worth recalling that in the capital the previous two months were a period of stabilization, while in the Upper Silesian-Zagłębie Metropolis it lasted three months in a row.

The RynekPierwotny.pl portal expert explains that developers sporadically raise the prices of apartments that have been on offer for some time. At the same time, they continue to start new investments, including apartments aimed at wealthy clients. For example, in Warsaw, one of the developers introduced a fairly large pool of apartments for sale in June, priced from PLN 27,000 to PLN 50,000 per square meter. Relatively expensive apartments also appeared in Wrocław and Łódź. At the same time, the cheapest ones disappeared, which explains the increase in the average price per square meter of those that remained on offer.

What choice of new apartments?

RynekPierwotny.pl checked what apartments can be purchased in a given city by singles, couples and families with children. At the outset, however, it is worth mentioning that thanks to the down payment, the amount for the purchase of the apartment that hypothetical buyers have is higher. For simplicity, it was assumed that all transaction costs are also included in it. In addition, the parents promised the young couples help in the possible finishing and furnishing of the apartment.

This means that a 2+1 family can afford to spend nearly PLN 717,100 (roughly the same as a month earlier), and a childless couple – slightly over PLN 590,200 (over PLN 3,300 less). In turn, an average-earning single person can spend less than PLN 474,000 on buying a new apartment with a loan and their own contribution, which is over PLN 2,900 less than in May.

Couples and 2+1 families are in the best situation. Developers offer a lot of apartments that meet their price expectations. Is it the same with singles? According to BIG DATA RynekPierwotny.pl, they will easily find a place for themselves in each of the largest metropolises. The largest selection of apartments priced at up to approx. PLN 474,000 is in Łódź and in cities that are part of the Upper Silesian-Zagłębie Metropolis (approx. 2.5 thousand premises). In other metropolises – especially Wrocław, Kraków and Warsaw – the offer is much more modest.