Banks and credit unions granted 62.7% less YoY housing loans in terms of numbers in July 2022, the Credit Information Bureau (BIK) reported. In terms of value, there was a decrease by 62.5% y / y to the lowest level since February 2015.
The average value of the granted housing loan was PLN 329.99 thousand. PLN and was higher by 0.8% on an annual basis, it was reported.
“For housing loans, July was catastrophic. There was no such bad result in terms of numbers for over 12 years, i.e. from January 2010, because in July banks granted only 9 thousand loans. In terms of value, banks granted housing loans for the value of PLN 2.967 billion This is the least for over 7 years, ie since February 2015. So we have a cliff also in terms of value,” commented the chief analyst of BIK Waldemar Rogowski.
“We are currently in the monetary policy tightening cycle. 10 interest rate increases are behind us. The current NBP reference rate is 6.5% and is at a level that has not been seen for 18 years, i.e. in August 2004. The last July increase has not yet been found, because However, the previous interest rate hikes have already significantly reduced creditworthiness – freezing the demand for housing loans, as well as the PFSA’s actions, tightening the requirements for calculating creditworthiness, which also have a negative impact on creditworthiness. as a consequence, they slowed down lending a lot,” he added.
When analyzing the situation in the individual amount ranges determining the value of the housing loan granted, in the period January – July 2022, a large differentiation can be seen. The lowest negative dynamics of housing loan sales, both in terms of number and value, concerned loans in the range of over PLN 500,000. PLN, in terms of numbers (-14.4%) and value (-11.9%). The highest negative dynamics, both in terms of numbers and value, occurred in loans up to PLN 150 thousand. PLN (-47.0%) and (-45.5%), respectively, was also reported by BIK.
The lead analyst indicated that the value of lending in the first seven months of 2022 is practically at the level of lending in the first seven months of 2018.
“And the July reading of the Index of Demand for Housing Loans at a historically low level (-66.8%) has already shown a significant cooling of demand in the housing loan market, which will obviously have a negative impact on the scale and value of lending in the coming months,” summed up Rogowski.
The monthly reading of the Quality Index of the housing loan portfolio in July 2022 was 0.78%. In the last 12 months (from July 2021 to July 2022), the portfolio quality has slightly deteriorated, as evidenced by an increase in the Index by (+0.20 percentage points), the release continued.
“As I have already indicated in the comments to previous newsletters, it seemed to me that the factor that may adversely affect the quality of the housing loan portfolio in the future is the interest rate hikes, as almost the entire portfolio of housing loans in PLN is floating rate loans. housing index was slightly deteriorating (increase in the value of the Index) in terms of 1, 3, 6 and 12 months, which could have heralded a deterioration in quality in the following months of the year. However, now a ‘gamechanger’ has appeared, which may limit, or actually hibernate, the increase in delays. there are, of course, credit holidays. in the first half of 2024, we may see an increase in the loss ratio of housing loans, and this may be cumulative version,” pointed out Rogowski.
Source: BIK and ISBnews
