Mikołaj Fidziński, Gazeta.pl: about 14.1 thousand only. A person applied for a home loan in July – according to the latest data from the credit information bureau. It’s nearly 70 percent. Less than a year ago and the least in more than 15 years, since BIK began collecting data. It is known – incl. This is why the MPC is raising interest rates so that demand for loans slows. But does this data indicate the failure of the Council?
Wojciech Matysiak, Head of the Real Estate Analysis Team at PKO Bank Polski: When it comes to raising prices, it’s hard to argue with her. We have high inflation, the economy had to be calmed somehow.
It seems The determining factor for mortgage demand was the recommendation of the Polish Financial Supervisory Authority regarding the calculation of creditworthiness [od kwietnia br. banki muszą liczyć zdolność kredytową przy założeniu, że oprocentowanie kredytu wzrośnie jeszcze o 5 punktów procentowych wobec aktualnego; wcześniej było to 2,5 proc., więc zmiana uderzyła w zdolność kredytową wnioskujących – red.].
This recommendation came at a time when the market was already calming significantly due to the interest rate hike.
So, the demand for loans is already declining, and the KNF has stamped it boots with its recommendations?
It’s hard for me to argue if this buffer is 5pp. A lot or a little higher than the current interest rate. Rather, it seems to me that It must somehow depend on the state of the market.
This should be counter-cyclical. When loan sales are very high and home prices are rising very quickly, the reserve can be a little higher. When the situation in the market is as it is today – we have a strong decline in sales of loans and apartments and prices Real estate Stop Growing – This tightening of credit conditions is making matters worse.
Do you see any chances of the final housing loan demand for recovery in the near future?
In the next few months or even a year Chances of a clear bounce are slim until we see interest rate cuts.
Banks are feeling lower demand and competitive pressure in the mortgage sector. However, we see no restrictions on access to housing loans on the part of banks’ credit risk managers – that is, no repeat of 2008.
So the banks want to borrow, but the Poles just don’t have the power?
It can be said that banks are trying to provide as much credit as possible. But The market conditions are really very tough I don’t think the situation will improve. There is only a chance of that when interest rates start to fall.
Can margins be reduced in banks? This may boost lending a bit.
Banks at the start of the year were more inclined to cut loan margins, as they saw deteriorating sales and increasing competitive pressure in the sector. Now, I don’t know if there are any such plans, but I’m afraid credit risk managers might block them.
why?
From a risk standpoint, it is not recommended to ease credit terms when, for example,in. Home prices may be at the top and will soon fall – and the value of the apartment is a collateral for the mortgage. I think we’re dealing with such a turning point in the market.
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So what about these home prices? You can see that they are already doing the braking. The fall that you expect will be more like a plateau or a massive avalanche?
I suspect Already in the third quarter data, we will see a decrease in prices, and it will last for about a year and a half. I expect this to be a correction to the price hike in the second half of 2021 and early 2022.
It was a very strong increase, mainly due to the increase in the price of building materials by several tens of percent. The increases in housing prices occurred under conditions of low sales and availability of prices for apartments. Home prices began to rise significantly stronger than a wage. Then there was a rise in interest rates and a recommendation from the Polish Financial Supervisory Authority. Basically, there was no “fuel” for the price increase at that time.
Translating to Specific Figures – Perhaps you should be prepared for twofold declines in home prices?
This can be A drop just above 10%, but not 20% for example.
Where does this “impulse” to lower housing prices come from?
First – there is a lack of demand. In the largest conglomerates, several percent of unsold apartments are in ready investments. In small towns, this percentage may be higher. The developers will be ready to offer promotions for these ready-made apartments.
As for the the new Investments, I primarily count on inflation cuts. Besides, the first symptoms are already visible. Major central banks have begun to tighten monetary policy. You can see a decrease in prices in commodity markets – for example, crude oil, which is used in the production of plastics, but also metals, wood, etc. A downtrend, not a correction.
Another issue is the complete inventory. Data from the Polish and global economy shows very large stocks with limited demand. Chances are that companies will want to reduce inventory, and this is related to price cuts.
If construction costs drop, will developers be able to offer customers lower prices?
yes. Especially since they know there is a problem with demand and creditworthiness. The price reduction is fully justified in order to be able to sell the apartments at all.
Hopefully such a scenario will happen. As a result, on the one hand, it will be possible to revive demand, and on the other hand, activity in housing construction will improve. At the moment, the developers have stopped new investments, because they cannot sell anything at current prices. Once they can build at a cheaper rate, they will start over and may find buyers for apartments already offered at lower prices.
What about NBP rates? Do you expect further increases? Or perhaps the current economic landscape spurs the MPC to cut interest rates sooner and stronger than it has anticipated so far? President Glapinsky has hinted that the first cuts could be made at the end of 2023.
When it comes to the coming months, there may be another spike, perhaps none at all. It seems to me that the cycle is coming to an end. In the current macroeconomic environment, I don’t see much reason to raise rates further.
I suspect There is a great opportunity to cut interest rates at the end of 2023, Maybe even halfway or sooner.
optimistic vision.
Like I said – we note several factors that may indicate that we are at the peak of inflation. Of course – it is not known, for example, when the anti-inflation shield will be lifted. In addition, we will inevitably face increases in energy prices at the beginning of 2023.
But we already know this and it is a derivative of what actually happened. Nowadays, however, we are witnessing a drop in commodity prices in the markets and monetary policy tightening by the most important central banks significantly reduces the inflationary trends. The specter of recession looms in the world, and the US economy is already in it. In addition, there are the very high inventory levels mentioned above.
There are many factors that suggest inflation will fall, although of course there are geopolitical risks Related, for example, to another war or the breaking of supply chains. But I can’t expect that anymore. If this happens, of course central banks will respond on an ongoing basis. But if the scenario of diminishing geopolitical risks materializes, there appears to be a basis for NBP to start cutting rates in 2023 – so hopefully sooner rather than later.
Let’s go back to the present day and the legal credit holidays that the Poles apply for en masse. Will they have problems, for example, buying a refrigerator in installments for this reason?
No, they will not have such problems. use with holidays Loans at PKO Bank Polski do not affect the assessment of the creditworthiness of customers.
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