In January, the value of mortgages issued in Poland exceeded 10 billion zloty (EUR 2.3 billion) for the first time in history, as the last of contracts eligible for a popular government subsidy scheme for first-time buyers were finalised.
The figure was five times larger than in the same month a year earlier, while the number of contracts signed increased 4-fold, data from the Credit Information Bureau (BIK) showed.
BIK estimated that of the more than 10 billion zloty in mortgages issued in January, around 6 billion fell under the government subsidy scheme.
Known as “2% Safe Credit”, it was introduced in the middle of last year by the former Law and Justice (PiS) government and provided first-time buyers with a fixed interest rate of 2% for 10 years. The difference between the guaranteed rate and market rates is subsidised by the state.
The programme was closed at the beginning of the year after the funds earmarked for the project ran out. The new government, which took office in December 2023, presented an outline of its own planned programme in January, but no bill had yet been submitted.
“The record January performance is the result of the continued processing of applications under last year’s 2% Safe Credit programme,” said Slawomir Nosal, the head of BIK’s analysis team.
“Admittedly, applications for these loans could only be submitted until the end of December 2023, but in the case of housing loans, the process at banks takes one to two months from the submission of the application. Therefore, the launch of the loans applied for last December is taking place in January and still in February,” Nosal added.
BIK reported that, as of mid-February, loans totalling 30.6 billion zloty had been granted under the programme.
The scheme has also contributed to a further rise in house prices in Poland, which in the third quarter of 2023 (just after the scheme was introduced) grew at the EU’s second-fastest rate year-on-year and fastest month-on-month.
Prices have also been pushed up by a shortage of housing, with some estimates pointing to a shortfall of as many as 4 million units. That has made entering the market difficult for young Poles, nearly half of whom live with their parents, one of the highest figures in the EU. (Notes from Poland/Business World Magazine)