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The impact of COVID-19 pandemic on financing the purchase of residential real estate through a mortgage in Poland


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Figure 1

Indicator of “apartments for sale” queries directed to the Google search engineSource: Google Trends, website: https://trends.google.pl/trends/explore?q=mieszkania%20na%20sprzeda%C5%BC&geo=PL [accessed: 10.10.2020.].
Indicator of “apartments for sale” queries directed to the Google search engineSource: Google Trends, website: https://trends.google.pl/trends/explore?q=mieszkania%20na%20sprzeda%C5%BC&geo=PL [accessed: 10.10.2020.].

Figure 2

Quarterly relation of demand to supply – primary marketSource: JLL report, Rynek mieszkaniowy w Polsce Q1 2021 [‘Residential market in Poland Q1 2021’], p. 5.
Quarterly relation of demand to supply – primary marketSource: JLL report, Rynek mieszkaniowy w Polsce Q1 2021 [‘Residential market in Poland Q1 2021’], p. 5.

Figure 3

Reasons for changes in lending policy – home loansSource: Report: Sytuacja na rynku kredytowym - wyniki ankiety do przewodniczących komitetów kredytowych, III kwartał 2020 r. [Situation on the credit market – results of the survey to chairmen of credit committees, Q3 2020], Departament Stabilności Finansowej [Financial Stability Department], p. 8.
Reasons for changes in lending policy – home loansSource: Report: Sytuacja na rynku kredytowym - wyniki ankiety do przewodniczących komitetów kredytowych, III kwartał 2020 r. [Situation on the credit market – results of the survey to chairmen of credit committees, Q3 2020], Departament Stabilności Finansowej [Financial Stability Department], p. 8.

Figure 4

BIK index – the demand for housing loansSource: BIK (Credit Reporting Service), media.bik.pl/informacje-prasowe/578007/bik-indeks-popytu-na-kredyty-mieszkaniowe-wyniosl-we-wrzesniu-2020-r-5-4 [accessed: 07.10.2020].
BIK index – the demand for housing loansSource: BIK (Credit Reporting Service), media.bik.pl/informacje-prasowe/578007/bik-indeks-popytu-na-kredyty-mieszkaniowe-wyniosl-we-wrzesniu-2020-r-5-4 [accessed: 07.10.2020].

Figure 5

Average mortgage loan margin (%)Source: AMRON-SARFiN report, Ogólnopolski raport kredytach mieszkaniowych i cenach transakcyjnych nieruchomości [Polish nationwide report on housing loans and property transaction prices], 2/2020, p. 16.
Average mortgage loan margin (%)Source: AMRON-SARFiN report, Ogólnopolski raport kredytach mieszkaniowych i cenach transakcyjnych nieruchomości [Polish nationwide report on housing loans and property transaction prices], 2/2020, p. 16.

Summary of negative and positive effects of the COVID-19 pandemic for borrowers

No. Positive effects Negative effects
1. Limiting consumer spending of households Uncertainty – difficulties in forecasting
2. Stable prices of residential real store Fall in supply of housing
3. Stable level of the Housing Accessibility Index Deterioration in the economic situation of households
4. Decline in demand for housing (less competition, grater negotiation opportunities on the market) Tightening the criteria for granting loans by banks (including in terms of own contribution, margin, maximum possible loan amount, exclusion from financing of industries particularly exposed to insolvency)
5. Easing the lending policy (drop in interest rates, statutory and non-statutory credit holidays) Extended waiting time for the funding decision
6. Lowering total credit costs for new loans There are no uniform credit moratoria standards for all banks
7. Improving remote customer service

Dynamics q / q m2 prices of apartments in the analysed cities in Q3 2020

RPO RPT RWO RWT
Gdańsk −1.7% −3.3% −0.7% 4.4%
Gdynia 1.4% 3.3% 1.4% 2.7%
Kraków −2.8% 2.0% −1.3% 0.5%
Łódź 3.4% 5.4% 0.6% 7.0%
Poznań 2.0% 0.3% 0.4% 2.4%
Wrocław 0.2% 0.9% 3.5% −2.6%
Warszawa 0.2% 7.9% 1.7% −3.0%
6 cities 0.2% 1.9% 0.4% 2.5%
10 cities 3.3% 2.7% 0.6% 0.2%

The structure of the LtV ratio for newly granted loans

LtV ratio (%) Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Up to 30% 14.63% 14.94% 15.67% 16.51% 15.11%
Between 30% and 50% 6.16% 6.25% 6.05% 5.95% 7.37%
Between 50% and 80% 36.93% 35.93% 36.25% 36.47% 38.91%
From 80% 43.09% 42.88% 42.03% 41.07% 38.61%

Comparison of mortgage loans offers

Month
February April September
Simulation name Citi Handlowy Housing Loan for the Priority segment Margin 1.74 Citi Handlowy Housing Loan for the Priority segment Margin 1.74 Citi Handlowy Housing Loan for the Priority segment Margin 1.89
Monthly costs (from the second month) 1357 PLN 1268 PLN 1153 PLN
Total cost of the loan 192.198 PLN 160.137 PLN 118.704 PLN
Real interest 3.8% 3.23% 2.46%
Bank margin 1.74% 1.74% 1.89%
Reference rate 1.71% 1.17% 0.28%

Own contribution in February, June and September

Bank name Own contribution (%)
February 2020 June 2020 September 2020
Alior Bank 10% 10% 10%
BNP Paribas 20% 20% 20%
BOŚ Bank 20% 30% 30%
Credit Agricole 10% 10% 10%
ING Bank Śląski 20% 30% 20%
mBank 10% 20% 10%
Bank Millennium 10% 10% 10%
Pekao Bank Hipoteczny 10% 20% 20%
Pekao SA 10% 15% 15%
PKO BP 10% 20% 20%
Bank Pocztowy 20% 20% 20%
Santander 10% 20% 10% (bank customers)/20% (external)

Dynamics q / q m2 prices of apartments in the analysed cities in Q2 2020

RPO RPT RWO RWT
Gdańsk −1.0% −0.1% −2.2% 2.4%
Gdynia 2.1% −3.4% −0.2% 0.5%
Kraków 5.7% 4.3% 1.6% 3.8%
Łódź −1.5% −2.7% −0.6% 4.7%
Poznań 2.9% 0.2% 0.2% 3.3%
Wrocław 2.0% −3.8% −1.6% 2.5%
Warszawa 1.0% −3.9% −1.2% 0.2%
6 cities 2.2% 0.3% −0.4% 3.5%
10 cities 3.6% −1.2% 2.4% 4.5%
eISSN:
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Language:
English
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2 times per year
Journal Subjects:
Law, Public Law, other