Mortgage market crisis in 2024
“The value of mortgage loan inquiries fell by 31.7% y/y in July 2024. – informs BIK Demand Index for Housing Loans. The value of the Index means that in July 2024, converted per business day, banks and credit unions sent to BIK inquiries about housing loans for an amount lower by 31.7% compared to July 2023,” the Credit Information Bureau (BIK) informed in a Tuesday statement.
It was added that in July this year, 30.63 thousand potential borrowers applied for a housing loan compared to 43.44 thousand a year earlier, which translates into a year-on-year decrease of almost 30 percent. In comparison to June 2024, the number of people applying for a housing loan increased by 11.6 percent.
Average value of mortgage loans applied for
Average value of requested housing loan amounted to PLN 435.88 thousand in July this year and was 6.2 percent higher than in July 2023. Compared to June 2024, it dropped by 1.6 percent – according to BIK data.
“As expected, the demand for housing loans slowed down after the end of accepting applications under last year’s Safe Credit 2% Program. Despite concerns, interest in housing loans did not fall to the level from before the launch of the Program and is currently about 1/3 lower than in July last year. On the other hand, in the m/m ratio, i.e. compared to June this year, the number of people applying for a housing loan increased by about 11%. This is positive news,” informed the chief analyst of the BIK Group, Waldemar Rogowski, quoted in the release.
The impact of new support programs on demand for mortgage loans
In his opinion, this may be the “effect of impatience” of potential beneficiaries of the announced new borrower support program. “These people applied for a loan on market terms,” Rogowski added.
credits
The analyst pointed out that in July 2023 we were dealing with the phenomenon of cumulative demand for housing loans from the first half of last year, related to borrowers withholding their loan applications, waiting for the launch of the Safe Credit 2% Program. Currently, therefore, as he added, the period of high base from July last year begins. In his opinion, this is the main reason for the low reading of the BIK Mortgage Demand Index in July this year.
“We are therefore seeing an effect that is the opposite of what occurred in the first half of this year, when we compared the level of demand to the low base of the first half of last year. Now we will witness the opposite effect, i.e. the high base effect of the second half of 2023. This will contribute to a decline in the value of the Index in the following months of this year,” Rogowski pointed out.
He emphasized that the second factor, partially compensating for the drop in this year’s July Index value caused by the lower number of applicants, is the increase in the average amount of the requested loan to PLN 435.88 thousand. “This is an amount 6.2 percent higher than in July last year. The increase in creditworthiness as a result of the real increase in wages at a stable level of interest rates is conducive to applying for higher loan amounts,” the analyst assessed.
The BIK Group consists of: Credit Information Bureau and Economic Information Bureau InfoMonitor and Digital Fingerprints. (PAP)
