The residential construction industry in Poland continued to be impacted by negative trends that began in 2022. Declines in building starts (-9% YoY), permits (-19% YoY), and completions (-8% YoY) were recorded in 2023. This reduced supply of new real estate, combined with demand stimulation resulting from a new government-sponsored program dedicated to first-time homebuyers, was reflected in accelerating real estate prices. As the prices of real estate break all-time records, the affordability for buyers keeps falling, which is a key factor supporting the growth in new mortgage lending.
The recent downturn in real estate construction, seen in 2022 and 2023, is expected to reverse due to rising property prices and new governmental support programs that are anticipated to boost demand. The impact of the monetary factor - namely high interest rates - is projected to diminish in 2024 and 2025, which should further support growth in new mortgage lending.
This sector is poised for additional momentum from a new government lending support scheme planned for 2024. Assuming these conditions, our base scenario forecasts a slight increase in overall mortgage lending in 2024, followed by a more significant rise in 2025 and 2026. Total outstanding lending is estimated to reach PLN 545 billion by 2026, with the loan-to-GDP ratio expected to stabilize at approximately 13%.
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Companies Mentioned
- ING
- mBank
- Millennium
- Pekao
- PKO BP
- Santander