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Will 2024 be the year of building houses? PKO BP analysis

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2024 may be the year of building houses – indicates a report by PKO Bank Polski. Investors are to be motivated by changing regulations on spatial planning, as well as stabilization of prices of construction materials.

“2024 may be a year of great motivation to start building a single-family house. This may be motivated by changing regulations on spatial planning, in particular changes in issuing decisions on development conditions, as well as stabilization of prices of building materials, EU environmental policy and the mentioned benefits for multi-person households. planned in the new loan subsidy program” – according to the PKO BP report “Puls Nieruchomości: 2024 the year of houses?”.

Will 2024 be the year of houses?

The authors of the report assessed that in 2023, the reality of the residential real estate market turned out to be “even more optimistic” than expected, and an important driver of sales was the greater than expected popularity of the Safe Credit 2% program. “2024 looks more difficult, and achieving similar sales levels as in 2023 will be a challenge,” said PKO BP analysts.

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They pointed out that a new housing program is to be in force from mid-2024, but its size will be “significantly smaller” than the amount that contributed to the housing market under the 2% Safe Credit.

“The assumptions of the new program include financial discipline to meet its costs of PLN 0.5 billion in 2024. The statutory limits on expenditure on subsidies to the Safe Credit 2% assumed that support in 2023 and 2024 could cover approximately 50 thousand loans, meanwhile, according to BIK, in the second half of 2023, banks granted 59.6 thousand loans under this program,” noted the authors of the report.

New housing program

They indicated that the Safe Credit 2% program was the largest source of funds. singles benefited. “In the new housing program, support for subsidized loan installments for the purchase of the first apartment for a single person will, however, be subject to more restrictive conditions – the loan amount to which the subsidy would apply is reduced to PLN 200,000 from PLN 500,000, and the age limit is reduced to 35 years. of 45 years,” they noted.

PKO BP reminded that according to the assumptions of the new program, borrowers could obtain subsidies for higher loan amounts by purchasing a property that is co-owned by them.

“The loan amount limits are to be higher for cities where the replacement value of a square meter of residential premises is higher than the value announced for the entire country. This provision increases the relative attractiveness of purchasing premises on credit in a large city,” it was assessed. “An income criterion will be introduced, but exceeding it will not definitively exclude the possibility of taking advantage of the program,” it added.

According to PKO BP analysts, households with at least three children will be able to benefit from the loosened criteria – then the support will cover not only the purchase of the first apartment, but also the improvement of housing conditions. “However, such households are more active on the single-family house market,” they pointed out, adding that the interest of families with four children in a residential property is already very low.

“In the case of the Safe 2% Loan, only 14% of borrowers applied for the purchase of a residential premises with a much greater interest in a house,” noted the bank’s experts. In their opinion, the government program may give an impulse to build or buy a house on the secondary market and renovate it.

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Material prices and house construction

PKO BP analysts pointed out that the new legal regulations introduce a general plan, an act of local law, which is to replace the study of conditions and directions of spatial development. The studies will be valid until the date of entry into force of the municipality’s general plan, no longer than December 31, 2025,” they noted.

It was explained that the general plan was to constitute a spatial development scheme and be binding on the integrated investment plan (ZPI) and the decision on development conditions. “New areas for residential development will only be allowed when the reserves of areas designated in applicable local plans and gaps in development do not ensure the satisfaction of expected needs in the field of residential development,” the report noted.

“Unless the commune adopts a general plan by January 1, 2026, it will not be able to issue new decisions on the location of public purpose investments or development conditions until the adoption of this plan,” analysts said.

In their opinion, changes in spatial planning may motivate investors thinking about building a house to accelerate the implementation of their plans in order to obtain development conditions based on current regulations.

“Another reason why an investor can speed up his decision to build or renovate a house is the behavior of prices of building materials. The last year has seen price stabilization, which, given rising incomes, means an increase in purchasing power,” said the authors of the report.

They added that the policy of the European Union, which plans to introduce a ban on installing fossil fuel furnaces (including gas heating) in new buildings, may also be a motivator for accelerating investor decisions. “This ban is to apply to new privately owned buildings from 2030,” it was noted.

Main photo source: Shutterstock



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