Expert on Start-up Loan: I am not afraid of an avalanche of queues

The wait for the new housing program is getting longer. Three weeks ago, the Government Legislation Center reported that the draft law on the Start-up Loan had been submitted to the Standing Committee of the Council of Ministers. The start-up loan is to be granted for a period of at least 15 yearswith a fixed interest rate set for a period of 60 months.

The amount of the subsidy for the installments will depend on the number of children in the family. Childless people will receive a subsidy for installments with an interest rate of 1.5%. Families with one child – 1%, with two – 0.5%, and with three or more – 0%.

The project also adopted amounts defining the maximum basis for calculating subsidies for instalments, taking into account the number of children: PLN 200,000 for a one-person household, PLN 400,000 for a two-person household, PLN 450,000 for a three-person household, PLN 500,000 for a four-person household and PLN 600,000 for a five-person household.

Read also: There are sparks in the government about a new program

Marek Wielgo, an expert from the rynekpierwotny.pl portal, when asked on TVN24 BiS whether Kredyt na start could reduce the availability of apartments, stated that this time such a situation will not occur.

– Of course, one cannot deny the truth of those who believe that supporting demand creates a temptation for sellers to increase prices. Only such opinions result from the very bad experiences of the previous borrower support program, the safe 2 percent credit. I am not surprised by these concerns, but please note how diametrically different the situation is a year ago and now – said Marek Wielgo on TVN24 BiS.

He also stressed that in the case of Safe Credit there was a sudden increase in housing prices due to the government introducing very favourable support conditions during a significant contraction in supply.

– No reasonable person would add money when there is no product on the market. We had such a situation last year. Considering that this demand was accumulated for a dozen or so months due to the collapse in the mortgage market, it had to cause an explosion. As a result, the cheapest apartments quickly disappeared from the market, and the more expensive ones remained – explained the interviewee.

Wielgo added that this year the situation is completely different. The market has seen more apartments because many developers believed in an upcoming wave of demand that probably will not come.

– And now, for now, the situation is very favorable for apartment buyersbecause developers introduced more apartments to the market. I am talking about the largest metropolises, i.e. where the demand is the greatest. They introduced a much larger number of apartments than they sold, because in fact, these sales dropped significantly after the expiry of the Safe Credit program – he assessed.

According to the expert, “given the limitations of this program, queues at banks should not be expected.”

– This program is beneficial for large families because these the restrictions contained in the program, I think that only a few singles meet or even two-person households, the interviewee said. The exception will be larger families, which will be able to sell their apartment and buy a larger one on attractive terms.

Wielgo added that many large families already have adequate housing conditions or are in a financial situation that prevents them from taking out a loan. – This is further evidence that we should not expect a radical increase in demand – he noted.

– This will not solve the housing problems of a very large part of Poles. Because it is estimated that up to 40 percent of households earn too little to afford a mortgage. Or too many to get in line for a council flat. Therefore, for a very large group, at the moment there is really no idea – the interviewee summed up.