# Research reports

Research report: Mortgage lending in Poland, 2017

## Research Report: "Mortgage lending in Poland, 2017-2019"

The growth in Poland's residential construction observed since early 2014 persisted throughout 2016. The number of new permits and starts increased to 212k and 174k respectively in 2016. Key driving forces of new residential construction have been record-low interest rates encouraging investment-type transactions and rising purchasing power of individuals. In 2016, average wages and salaries increased by +2.7% and the unemployment rate fell to 8.3% as of Dec. 2016 vs. 9.7% a year before. At the same time, residential real estate prices have been pretty stable with -3% to +5% YoY change as of Q3 2016, depending on location. Nevertheless, it is worth noting that housing prices are still lower by 2% to 10% if compared to 2010 levels.
In contrast to strong residential construction sector, new mortgage lending by banks remained depressed in 2016. New sales of mortgage loans were almost unchanged in terms of value and they contracted by 2% if measured by volume. There are multiple reasons of weak sales of new mortgage loans by banks. One of them is higher share of buyers paying with cash, which is a consequence of increasing investment demand due to low interest rates (property for rent). Moreover, mortgage loans have been more expensive due to growing interest margins as banks have been passing increasing fees and taxes on clients. Finally, the range of mortgage lending offered by banks in Poland is still inadequate. While fixed interest rate contracts are very rare, variable rate loans, adjusted on a quarterly or half-yearly basis dominate in banks offer.
For more information on recent developments in the Polish banking sector, please refer to the full publication.

## Table of contents

Executive summary
1. Residential real estate stock & prices
Slide 1: New dwellings completed , starts, permits, 2011-2016
Slide 2: New dwellings completed by regions, Q1-Q3 2016
Slide 3: Residential real estate prices in key cities, 2011-2016 Q3
2. Mortgage lending
Slide 4: Total lending to households by type of loan, 2011-2016
Slide 5: Mortgage loans to households, local vs. foreign currency, 2011-2016
Slide 6: Number of new mortgage loans, average loan size, value of new loans, 2011-2016
Slide 7: Distribution of new mortgage lending by top cities, Q3 2016
Slide 8: Mortgage lending penetration benchmarks - International comparison, 2016Q3
Slide 9: Mortgage lending in Poland vs. Europe- market size vs. growth, 2014Q3-2016Q3
Slide 10: New mortgage loans by size and LTV, 20113 Q1 - 2016 Q3
Slide 11: New mortgage loans by currency, 2011 Q1 - 2016 Q3
Slide 12: Top players (market share>5%) on the mortgage loans market, 2015 - 2016 Q3
Slide 13: The role of financial intermediaries in mortgage loans distribution, 2011-2015
Slide 14: Reference rates: WIBOR3M & LIBOR CHF 6M, 2011-2016
Slide 15: Average lending margins evolution – PLN loans, 2011-2016
3. Regulatory issues, risk
Slide 16: The evolution of mortgage loan NPLs, Mar.2009-Sept. 2016
Slide 17: Regulatory environment with regards to mortgage loans
Slide 18: CHF/PLN exchange rate, 2005-2016
4. Forecast
Slide 19: Mortgage loans – outstanding value forecast and GDP penetration, 2017-2019
Methodological notes
End of report