Banks and SKOKs sent requests for home loans to the Credit Information Bureau (BIK) in August for an amount 299.9% higher than a year earlier, the bureau said. The number of applications rose by 213.8% y-o-y to 38,87,000, while on a monthly basis, it fell by 10.5%.
The average value of a home loan applied for in August was PLN 410.4k, up 21.9% y/y. Compared to July 2023, it was at virtually the same level, it stated.
“The August reading of the BIK Housing Loan Demand Index shot up like a space rocket reaching a historic high of almost 300%, meaning that potential borrowers submitted loan applications for a value as much as three times higher than a year ago. There are three reasons for such a high Index reading in August this year. The first reason for the increase in the Index value is the increase in the number of people applying for a home loan from around 12,400 in August last year to almost 38,900 in August this year. This is undoubtedly, on the one hand, the result of the strong interest in credit under the ‘2% Safe Credit’ programme,” commented BIK Group chief analyst Waldemar Rogowski.
BIK estimates that around 60% among those applying for a home loan in August this year were people aged up to 45, with no previous home loan, applying for a loan of up to PLN 600,000 at a bank participating in the programme. In the process of verification of the applicant by the bank, the BIK database does not have the possibility to mark that the enquiry was made in connection with the programme, so this is only an estimated figure, the chief analyst stressed.
“In part, the increase in demand for home loans is due to improved sentiment towards home loans among potential borrowers who, for formal reasons, cannot be beneficiaries of the programme, but whose creditworthiness has increased. This is because creditworthiness is increasing as a result of rising wages, falling WIBOR in anticipation of falling interest rates, as well as regulatory action – the FSA’s spring reduction of the interest rate buffer level. Consequently, there has been an increase in the availability of housing credit, which has directly contributed to the increase in demand,” Rogowski pointed out.
Secondly, when interpreting the Index reading, it is important to remember that in August 2022 the lowest number of people applied for a home loan since January 2007, resulting in the historically lowest Index value reading causing a low comparative base for August this year. It is the statistical effect of the low base of August 2022 that is partly responsible for such a high current reading of the BIK PKM Index, he added.
“Thirdly, this high Index value was also influenced by an increase in the average amount of credit applied for by as much as one-fifth higher compared to August 2022,” concluded BIK Group’s chief analyst.
Source: BIK and ISBnews
