Accepting the income of some entrepreneurs or cosmetic corrections regarding own contribution – such moves are starting to be signaled by banks in the case of housing loans – assesses HRE Investments. Liberalization is symbolic in the face of the difficulties that banks introduced after the outbreak of the epidemic. What’s more, there is also no need to count on a large correction in the real estate market.
- It is very difficult to get a mortgage at the moment, but banks will be slightly deviating from their stringent requirements
- The downside is that, according to the analysis of the AMRON center, there will be no large correction in real estate prices in Poland
- In turn, among the positives, we can see that if someone gets a loan, they can enjoy the lowest costs in history
Loans are currently the cheapest ever. “In June, new housing loans were sold at an interest rate of 3.3 percent per annum. It is worth recalling that even before the epidemic, interest rates on bank deposits were similar, and loans – even housing loans – were 1/3 more expensive“- writes Bartok Turek, chief analyst at HRE Investments.
Banks and the mortgage loan in August 2020 Real estate prices
As he notes, it is hardly surprising that there are many people willing to get mortgage. It also reserves that However, only the least risky customers from the banks’ point of view can count on such loans, i.e. those with a contract of employment, decent income and high own contribution (preferably at least 20-30%).
“Over the past few months, banks have clearly tightened the standards of granting loans. Even at the beginning of the year, it was possible to take out a housing loan, earning on the so-called garbage, operating as part of self-employment or owning 10 percent. own contribution. Today, such a mix is almost a guaranteed negative decision “- we read.
According to the Turk, especially for young people, access to housing loans is currently very difficult or even impossible.
“The easing of the lending policy criteria declared by the banks may be a little consolation here. These come from the surveys conducted by the central bank. How does it look in practice? So far we are dealing with almost imperceptible changes – for example, a slight liberalization of the rules when granting loans with a low own contribution, or accepting income from at least some one-person companies (especially those whose activities have not suffered recently) “- assesses the analyst.
The problem with real estate prices
What’s more, housing prices are also an obstacle. “There will be no major correction in the real estate market,” AMRON estimates in the analysis.
The president of AMRON, Jacek Furga, believes that we should not expect major changes on the residential real estate market in the near future.
“The price adjustment may take place at a later time in response to the worse financial situation of Poles. However, the situation after the Subprime crisis (2007-2009), when transaction prices fell as much as 20 percent. probably will not happen again “- it was written.
The analysis states that in 2005-2008 we had to deal with a growing speculative bubble and more than 100% price increases, while over the last few years, increases have been much less spectacular and do not exceed 50% on average.
“In the current situation, large drops in housing prices could only occur in the presence of a huge economic collapse and high interest rates, and so far we are not in any danger” – the analysis reads.
However, there are also pluses
Bartosz Turek also notes that, on the other hand, those who meet the requirements set by banks, can take advantage of the cheapest loans ever.
“This is not only conducive to low loan installments, but also has a positive effect on the creditworthiness estimated by banks. The survey conducted by HRE Investments shows that a model family of three in which both parents work, bringing home the national average, they can borrow 704,000 for an apartment. PLN as part of a 30-year loan. This is 11,000 less than in July, but also 87,000 more than last year, “we read.
HRE Investments notes that the low interest rates on loans are due to interest rate cuts by the Monetary Policy Council. “However, a large number of borrowers are not able to enjoy the benefits of high creditworthiness, because the banks raised requirements regarding the stability of income sources or the amount of own contribution “- emphasizes Turek.
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