Sales of home loans totaled PLN 5.1 billion in August, up 133.7% y/y, according to data from the Credit Information Bureau (BIK). In volume terms, the number of home loans issued last month rose 98.6% y/y to 13,300.
In January-August this year, by number, the number of housing loans granted fell 26% y/y, while by value, it fell 22.5% y/y.
“For home loans, August performed very well, confirming the strong recovery that has been evident for several months. In numerical terms, banks granted 13,300 loans, the highest level of monthly lending since last May. In value terms, banks granted housing loans to the tune of PLN 5.1 billion – also the highest since May 2022,” BIK Group chief analyst Waldemar Rogowski commented..
“What are the sources of credit growth? There are several. It is both a result of the revival of demand for home loans following the increase in creditworthiness, to which both the liberalization of supervisory requirements for calculating creditworthiness – the reduction in the required level of the interest rate buffer, the decrease in the level of WIBOR in anticipation of interest rate decreases, the deceleration of price growth dynamics (disinflation) and wage increases have contributed,” Rogowski calculated.
The increase in creditworthiness has translated into an increase in the value of loans granted – currently the average value of a loan granted is PLN 384.24 thousand, 17.6% higher than a year ago, Rogowski also pointed out.
“There are already clear signs of the launch of the government’s ‘2% Credit’ program in August lending. Four out of ten housing loans were granted by banks under this Program. Rising real estate prices are also accelerating the decision to take out a home loan of those who, for formal reasons, cannot be beneficiaries of the government program,” assessed the BIK Group’s chief analyst.
The monthly reading of the Housing Loan Portfolio Quality Index for August 2023 was 1.54%. Over the past 12 months (from August 2022 to August 2023), the quality of the portfolio has deteriorated, as evidenced by an increase in the Index by (+0.62 percentage points), it was also reported.
“The current Index reading is worse than it was a month ago (a deterioration of +0.09 percentage points). At the time of the introduction of credit moratoria, I assumed that the negative effect of the deterioration in the quality of PLN loans would be significantly reduced. And this has happened. The deterioration of PLN loans is at a low level. On the other hand, what is now beginning to cause me concern is the deterioration in the quality of foreign currency loans, most of which were issued in the Swiss franc. The cause of this phenomenon is not credit risk, which could be due to financial problems of borrowers. Thus, the source of the risk is not the household’s financial situation, but the legal risk associated with litigation. Additional risk factors for this portfolio are the strengthening of the franc exchange rate and a further possible increase in interest rates in Switzerland.” – Rogowski explained.
Banks reported 1.147 million accounts with credit vacations worth PLN 284 billion.
Banks have reported 1.147 million home loan accounts subject to credit vacations, worth PLN 284 billion, to the Credit Information Bureau’s (BIK) database by August 31, 2023, BIK reported.
Earlier, the bureau reported that by July 31, 2023, banks had reported 1.144 million housing loan accounts covered by credit vacations worth PLN 283 billion to its database.
According to the Law on Community Financing for Economic Ventures and Borrower Assistance, borrowers could apply for four months of credit vacations in 2022, and can apply for credit vacations this year as well.
Source: BIK and ISBnews
