For a mortgage in May this year a total of 23.8200 potential borrowers, which means a decrease by 50.6 percent year on year – announced the Credit Information Bureau (BIK).
Average value of the requested mortgage in May this year was 343.8900 PLN was higher by 2.9 percent. y/y and lower by 2.8%. than in April this year.
The value of BIK Index of Demand for mortgage (BIK Index – PKM) informs about the annual dynamics of the value of requested mortgage. The value of the Index means that in May 2022, per business day, banks and credit unions sent inquiries to BIK for mortgages for an amount lower by 51.6%. compared to May 2021
The forecasts for the May BIK reading of the Demand Index for mortgage, unfortunately, have come true. Demand falls into the abyss. And the explanation of the March anomaly – the increase in the value of the Index by 4.3 percent.
The lowest in 14 years
As a result of new stricter requirements of the Polish Financial Supervision Authority regarding the calculation of creditworthiness, it was appropriate. The current index reading in May is yet another confirmation of a very large cooling down in the mortgage market in the following quarters of the year.
The May value of the Index is the lowest in the history of measurement since January 2008, i.e. for 14 years” comments the chief analyst of BIK, Waldemar Rogowski.
“The May value of the Index was adversely affected by the number of applicants, which was by 50% lower than in the previous year. It is the lowest since January 2007, i.e. for 15 years, since BIK analyzes the number of applicants.
It should be remembered that the number of people applying for a housing loan has been dropping regularly since April 2021. Unfortunately, I am afraid that the number of applicants will fall further in the coming months” he adds in the release.
Mortgage primarily influenced by monetary policy
Rogowski pointed out that the value of demand for mortgage in the coming months will be primarily influenced by monetary policy.
“Further tightening and an increase in interest rates will further reduce the creditworthiness of potential borrowers, and thus significantly weaken the demand for a mortgage”, concludes the analyst.
The BIK Index – PKM is calculated per business day, excluding inquiries about mortgage for amounts exceeding PLN 10 million and inquiries about the same client in the next 90 days. The index methodology was developed by the Credit Information Bureau in cooperation with the Institute of Economic Development of the Warsaw School of Economics. The index is published monthly.