Secure 2% Credit” – Where can we find the most apartments that qualify for the program?

11 January 2023

REDNET Property Group analysts have prepared a list of primary market apartments in the six largest cities in Poland that qualify for the “2% Safe Loan” program. According to data from the housing portal tabelaofert.pl, the largest number of apartments will be available in Lodz (80%), while the smallest in Warsaw (40%). In each of the analyzed cities, studios and two-room apartments have the highest availability.

The high level of interest rates and the new recommendations of the Financial Supervision Commission (KNF) have negatively affected the creditworthiness of Poles, resulting in a decrease in the availability of apartments. In response, in December 2022, the Minister of Development and Technology presented the assumptions of a new government housing program to help Poles purchase premiere real estate. Its essential element is the concept of “2% Safe Credit,” a system of loan subsidies for the purchase of a first apartment. The program is expected to take effect no later than the third quarter of 2023.

“Safe Credit 2%” will be available to a person up to the age of 45 who has not previously owned an apartment, house or cooperative right to an apartment or house. The loan can also be taken by spouses or parents of at least one common child. The above conditions must be met by only one of the spouses. The loan can be obtained for apartments from both the primary and secondary markets. It will also be possible to use the funds for expenses incurred in connection with the construction of a single-family house, including its finishing, as well as the purchase of a landed property or part of it, in order to build a house on it. The maximum loan amount is PLN 500,000, or PLN 600,000 for married couples or parents with at least one child. The program does not have a limit on the price per square meter of housing, which also allows the purchase of a unit with a higher standard of finish.

“Safe Credit 2%” mechanism is that a subsidy will be made from the state budget for 10 years for the difference between the fixed rate determined on the basis of the average interest rate on fixed-rate loans in lending banks (current as of the date of determination of the interest rate on fixed-rate loans on the date of granting the loan and after 5 years) and the interest rate on the loan according to the 2% rate. Support will be provided for loans with a periodically fixed interest rate, i.e. during the period of application of subsidies to the installments of this loan (the first 10 years of repayment), the effective interest rate of the loan from the perspective of the borrower will be 2% plus the bank’s margin. According to the program, the state budget should finance 30-40 thousand such loans annually. “Safe loan 2%” can also be combined with the currently functioning program “Apartment without own contribution”.

The amount of the installment after the ten-year support period will be influenced by several factors, such as the original financing period (the shorter it is, the greater part of the principal has already been repaid by the borrower) and the current level of interest rates. The bank, when assessing the borrower’s creditworthiness on the date of financing, must take into account the entire repayment period of the loan. If, after the end of the ten-year support period, the amount of the loan installment excessively burdens the borrower’s household budget, additional mechanisms are provided to help in individual cases, such as extending the loan repayment period by up to five years.

How many apartments available under the program?
“We analyzed the availability of apartments from the primary market in six of Poland’s largest cities. To determine the availability of apartments under the “2% Safe Credit” program, we assumed that the maximum loan amount was left at the same level regardless of the region – 500 or 600 thousand zlotys. Other factors taken into account were: the lack of a required own contribution to the loan (LTV-100%) and the price of the apartment not including discounts or rebates and a parking space,” says Robert Chojnacki, founder of the tabelaofert.pl website. “According to our data, the availability of apartments in different cities varies and depends on the price level in a given location. In Warsaw, the program’s criteria, at the end of Q3 2022, were met by less than 40% of the available apartments, and in Łódź, more than 80% of the units,” Robert Chojnacki adds.

“The average square footage of eligible apartments in Warsaw ranges from about 41 sqm. to nearly 49 sqm in Lodz. In each of the analyzed cities, studios and two-room apartments have the highest availability. For example, in Wroclaw, more than 70% of all available two-room apartments met the program’s criteria (as of the end of Q3 2022), for three-room apartments it was 47%, and for four-room units it was only 16%. In Krakow, less than 6% of all four-room apartments meet the program’s criteria, while in comparison, in Lodz, it’s already 24% of units of this type,” notes Robert Chojnacki.

“It is worth noting that the availability of apartments, as well as houses, is significantly increasing in agglomerations. Thanks to the popularization of remote working and the hybrid model, demand on the housing market in satellite localities may increase by leaps and bounds, especially for apartments with larger areas, whose availability in central cities is lower due to the maximum total price,” says Ewa Palus, director of REDNET Consulting.

Example banner for displaying an ad. It can be higher.