The Credit Information Bureau (BIK) has reported a significant decline in home loan inquiries for July, with requests falling by 31.7% compared to the same month last year. According to BIK, the total number of home loan applications dropped nearly 30% year-on-year to 306,300. However, on a monthly basis, there was an 11.6% increase in applications from June.
In July, the average value of home loans applied for stood at PLN 435,880, marking a 6.2% increase from the previous year. Yet, this figure represents a 1.6% decrease from June.
Waldemar Rogowski, BIK Groupâs chief analyst, attributed the slowdown in loan demand to the conclusion of the â2% Safe Creditâ program last year. Despite the downturn, Rogowski noted that the current demand is not as low as before the programâs introduction, although it remains about one-third lower than July 2023 levels. On a positive note, the month-on-month increase in loan applications suggests a potential âeffect of impatienceâ among prospective borrowers, possibly driven by anticipation of a new borrower support program.
Rogowski also highlighted a significant factor in the July data: the previous year saw a build-up of loan demand during the first half, as borrowers waited for the âSecure Credit 2%â program. This backlog has contributed to the current high base effect, which is now impacting the BIK Mortgage Demand Index.
Looking ahead, Rogowski expects the index to reflect the high base effect of the latter half of 2023, leading to lower readings in the coming months. Nonetheless, the increase in the average loan amount to PLN 435,880, driven by higher creditworthiness due to real wage growth and stable interest rates, offers some compensation for the overall decline.
âThe rise in loan amounts reflects growing creditworthiness and an increase in real wages amid stable interest rates,â Rogowski concluded.
