“Mortgage lending in Poland will recover, but slowly”

March 1, 2011 - PRLog -- "After experiencing a significant drop in sales in 2009 and a bounce in 2010, mortgage lenders operating in Poland are likely to see continued but sluggish recovery in new sales through 2011–2013. The growth in new mortgage lending will be supported by the persistent deficit of residential real estate and stable real income of the population. On the other hand, a more restrictive regulatory environment, expiration of government subsidies and growth in nominal interest rates will prevent the recovery from being robust during 2011–2013” explains Marcin Mazurek, Director of Intelace Research, a consulting company specializing in CEE financial-markets research.

RESIDENTIAL CONSTRUCTION IN POLAND
In contrast to many other European markets, no significant correction in residential real estate prices could be observed in Poland from 2008 to 2010. This can be attributed to a persistent deficit of quality flats and houses as well as a still-limited supply of new units. The global crisis and frequent problems with financing have delayed or halted several construction projects during the last two years. The number of completions fell in 2010 by over 15%, which suggests that most developers preferred to reduce supply rather than to offer significant price reductions.

MORTGAGE LENDING IN POLAND
After a sharp decline in 2009, sales of new mortgage loans rebounded in 2010. The number of new loans increased by 22%, while the lending value jumped by 26% in 2010. The total stock of outstanding mortgage (housing) loans exceeded 263 billion PLN (EUR 66 billion) as of the end of 2010, while the mortgage loan/GDP penetration ratio increased to 18.5%. Since early 2009, mortgage lenders have had to adjust to the more and more restrictive regulatory environment, which is effectively reducing sales of new loans, in particular those of fx-denominated mortgage contracts.

FUTURE OUTLOOK
Multiple driving forces will affect mortgage lending in the near future. A persistent demand for residential real estate and the stabilization of the financial conditions of households will drive sales of mortgage loans. On the other hand, the more-restrictive regulatory environment and cuts in government subsidies for first-time home buyers are likely to negatively affect the mortgage business. As a result, sales of new mortgage loans are likely to increase slowly (in contrast to previous years) through 2013. Apart from weaker growth in sales, banks will need to respond to growing risks, including the recently observed growth in LTV ratios and the general upward trend in interest rates.
For more information on recent developments in the Polish banking market, please refer to the publication "MORTGAGE LENDING IN POLAND, 2011–2013," available at: http://www.intelace.com/publications.html

ABOUT THE REPORT
“Mortgage Lending in Poland 2011–2013” is the latest full update of our annual publication on the mortgage lending sector in Poland. It describes the present market structure and recent trends in the market and also provides short-term estimates of the outstanding volumes of mortgages for the years 2011 through 2013. Compared to the 2010 edition, it has been revised and upgraded with new analyses and now contains 30 pages.

ABOUT INTELACE RESEARCH
Intelace Research is an independent consulting company that focuses on the financial markets in Central and Eastern Europe. Intelace Research specializes in management consulting and custom research services, including market entry strategy, product launch, and performance and benchmarking analysis.

During 2005–2010, Intelace Research provided its products and services to more than 50 clients, including major CEE banks and several "The Banker" top world banks. To learn more about the company, visit Intelace Research’s webpage: www.intelace.com .

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Intelace Research is an independent consulting company that focuses on the financial markets in Central and Eastern Europe. Intelace Research specializes in management consulting and custom research services, including market entry strategy, product launch, and performance and benchmarking analysis.

During 2005–2010, Intelace Research provided its products and services to more than 50 clients, including major CEE banks and several "The Banker" top world banks. To learn more about the company, visit Intelace Research’s webpage: www.intelace.com .