Time of major changes – the first half of 2020 on the credit and real estate market
This year is full of numerous changes in the finance sector, including major changes in the functioning of mortgage loans. Several key economic decisions have significantly changed the situation in the entire banking sector. Will they be permanent changes? And how will the credit market behave in the face of subsequent regulations in the economy?
The announcement of the introduction of a bank tax, announced in November last year, has become a pretext for raising interest rates on mortgage loans by the majority of banks operating on the Polish market.
These increases are a permanent trend
In May and June margins for such loans increased and it should be noted that they are significant, ranging from 0.2 to 05 percent, and therefore severe for the pockets of potential borrowers.
As a result, the market is seeing a steady decline in credit availability and it can already be assumed that the situation will continue to deteriorate. Put simply – fewer Poles today can afford a housing loan.
Of course, the changes introduced by banks can be explained by the provisions of the recommendation of the Commission for Banking Supervision, according to which our compatriots are increasingly prone to debt.
Importantly, our ability to pay this type of debt does not increase in any way, so you can understand this conservative behavior of the banking sector.
A clear signal to tighten the rules for granting mortgage loans
were also information from leasing companies, according to which as much as 95 percent. newly purchased cars are bought in the form of leasing or credit, and only 5 percent – for cash.
The changes in the government’s Flat for Youth program are also significant for the housing loan market. The government’s announcement about the termination and final closure of this program in 2018 significantly influenced the interest of young people in the government subsidy.
This is clearly seen in hard figures – by June 6, 2016, the total value of next year’s funds from this program used was already at USD 240 million. And since there is no indication that interest in the program will weaken, the money from government subsidies will be rapidly decreasing.
According to the Act, 50 percent can be used this year. funds from 2017 and the total amount that is allocated in the program for 2017 is USD 373 million. So only USD 132 million remained.
At the beginning of June, we met a new government housing program that is to replace MdM – it is a Plus Apartment. The guiding idea of the new project is to orientate young people to the rental of apartments, which is a common trend in Western Europe. According to the assumption, new apartments will be built mainly on plots owned by the State Treasury.
Theoretically, it is an interesting alternative for young people who thus get rid of the “credit muzzle” that they would have drawn for decades. What’s more, government assumptions will also be able to pay off such a rented apartment by the most persistent.
However, the sociological question remains open – what about the common need for possession in our country? Can Poles change their habits and move their own (though in fact bank-owned) flats to rented flats? It is certainly difficult to answer this question today.
The unanswered question also remains
How the new government program will work in smaller towns with significantly lower rental prices. Skarżysko or Łowicz is not Warsaw, finding a flat for rent for USD 1,000 is not a problem. Although the assumed rental rates in smaller towns are to be slightly lower, there are many indications that the Flat Plus program solutions for such places may not be competitive at all, and thus completely ineffective.
Finally, it is worth paying attention to the legal action that has recently raised the most controversy – we are talking about the Act of 14 April 2016 on suspending the sale of the property of the Agricultural Property Stock of the Treasury and amending some acts (Journal of Laws 2016.585). It introduces significant changes in the Act on Land and Mortgage Registers and the Mortgage, Civil Code and the Act on shaping the agricultural system.