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Flats. Starter apartment. “Politicians invited buyers to play roulette”

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Poland is increasingly wondering whether intervening in the dynamically developing housing market is really a good idea, notes Bloomberg, referring to the future of the Mieszkanie na Start program.

As Bloomberg pointed out, on May 6, a protest against the state's housing policy, including the planned “Mieszkanie na start” program, took place in front of the headquarters of the Ministry of Development and Technology in Warsaw. The agency notes that previously Minister Krzysztof Hetman claimed that the social reaction was intense and that the ministry received calls with threats and offensive words.

Read also: “Hate” and “insults” against officials after the announcement of the new program. The Ministry comments

At the same time, the statement of Deputy Prime Minister and Minister of Digital Affairs Krzysztof Gawkowski was recalled, who said in a radio interview on Friday that “it may be that there will be no zero percent loan and it will be replaced by another solution“.

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Increase in real estate prices in Poland

Bloomberg notes that while some of the reaction to the government's housing program is political, opposition is “also present in the target market, even though the average interest rate on new mortgage loans exceeds 7 percent.”

Many young Poles are worried about the consequences of such a cheap loan – instead of helping buyers, it may actually put them out of reach of buyers due to the associated potential increase in property prices.

Bloomberg cites Eurostat data showing that apartment prices have doubled over the last decade. It doesn't end there. The latest data from the National Bank of Poland show that there has been a noticeable acceleration in this area recently. The effect is that the average price of a 70-meter apartment in Warsaw increased to over PLN 1.1 million from PLN 671,000. PLN five years ago.

Read also: Increases of almost 30 percent. In this market, apartment prices have skyrocketed.

Program from the election campaign

The new “Mieszkanie na start” program is the result of last year's election campaign. “After the previously ruling Law and Justice party introduced a program of low-interest loans at 2 percent, Donald Tusk's Civic Platform went a step further and proposed a 0 percent loan.” – noticed.

Bloomberg reminds that “unlike the previous one, the new program has no restrictions on the purchase price, but sets availability thresholds based on income. It is scheduled to be launched in the fall.”

– There is no doubt that the new program may create additional demand on the housing market – said Kazimierz Kirejczyk, senior advisor at the consulting company JLL. – Investors who have cash may accelerate purchases, fearing that the lack of price limits may disrupt the residential real estate market in all its segments – he said.

Starter apartments are already having an impact on the market

Bloomberg states that concerns about price increases are not exaggerated. It was recalled that “when the 2% program was introduced in 2023, buyers rushed to take advantage of the subsidies. Demand for mortgage loans reached record levels, state funds were exhausted within a few months, and prices rose the most in all European countries “.

Although this time quarterly restrictions have been introduced in the program to prevent sudden spikes, the impact of the new program on the real estate market has already been noted. Bloomberg indicates that after the publication of the draft “Mieszkanie na Start” program, asking prices increased significantly.

Some developers offered customers reservations before loan subsidies, and the number of such agreements is growing, according to data from the research company OtoDom Analytics.

Read also: The race to sales offices has started

The fate of the program hangs in the balance

However, the situation “could be reversed” if the government changes course. According to Kirejczyk, the future of the program is a matter of political decision, and the parties of the ruling coalition differ in their approach to housing issues, which creates uncertainty on the market. In addition, Minister Krzysztof Hetman, responsible for the project, left the government to run for the European Parliament in the June elections.

– Politicians have invited developers and buyers to a kind of roulette game in cities where the offer is still limited. Should we accelerate construction and purchases in the face of another price increase, or wait until the plan is thrown out or significantly changed, which should cool down the heated market – said Kirejczyk, quoted by Bloomberg.

“During the protest in Warsaw, the majority sharply criticized politicians for helping banks, developers and property owners, and called for the introduction of initiatives in the field of social housing and greater regulation of the rental market. Some simply want less state interference,” the agency notes.

– It does not help that the government is interfering in the housing market again – said Piotr, 30, who took part in the protest with his wife, in an interview with the website's reporter. – We want to take out a loan and buy our own apartment, so theoretically we should be grateful, but market prices are rising again – he added.

Main photo source: markusz/Shutterstock

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