Interest Rate Cut Favors Housing Demand, But It’s Not Enough


To what extent does the greater availability of loans translate into demand for housing? Has the interest rate cut led to increased investor interest in residential projects intended for institutional rental? How does the change in the credit market affect the investment plans of companies? Are developers planning suburban investments and in the outer districts of cities to expand the group of apartment buyers due to lower prices? The survey was prepared by the property service

Zuzanna Należyta, commercial director at Eco Classic.

Every interest rate cut has a positive impact on the demand for mortgage loans and, consequently, on the purchase of apartments. In the case of our investments, about 50% of transactions are carried out with the support of a mortgage. We estimate that as prices rise, this percentage will increase. Therefore, any reduction in the mortgage interest rate stimulates demand.

The last rate cut was significant, but it’s hard to assess how much its size was dictated by the upcoming elections. Therefore, we should expect that after the elections the pace of cuts will be reduced. In this situation, it is difficult to make decisions about starting new investments when there is uncertainty whether customers will be able to obtain credit.

Angelika Kliś, board member at Atal

A lower interest rate theoretically means a lower cost of financing apartment purchases, better creditworthiness, and therefore good news for developers and their clients who can’t take advantage of the preferential BK 2% programme rates. However, despite the rate cuts by the RPP, the current interest rate is still relatively high when compared to two or three years ago.

We have seen increased interest in clients involved with the institutional rental market since spring, but we do not operate in this sector. Although market prospects have recently improved, as a large developer we do not act impulsively. We consistently implement this year’s plan and introduce new projects. Since we design our investments with various customer groups in mind, our portfolio also includes those located in the suburbs. Families are primarily looking for homes in these areas due to the greater affordability.

Małgorzata Ostrowska, marketing and sales manager at J.W. Construction

We currently see positive aspects of the recent interest rate cut and more available loans. Young people, looking for their first apartment, have returned to the market, although we also see somewhat older beneficiaries among the 2% credit beneficiaries. Customers who were delaying their purchasing decisions, expecting a stabilization of the economic situation and less restrictive lending conditions, also returned. Seeing a decreasing supply and rising prices, they are increasingly willing to sign purchasing agreements.

As for people buying properties for investment purposes, we have not noticed any significant changes in this group. Investors have been active practically all the time. These are mainly people purchasing premises for cash, preferably those allowing a 23% VAT tax deduction. The approaching end of the year, which speeds up decisions due to the desire for tax optimization, favours these purchases. And we are talking about large sums, even in the amount of PLN 150,000.

Joanna Chojecka, director of sales and marketing for Warsaw and Wrocław in the Robyg Group

This type of interest rate cut can be a minimal relief for people paying off current loans, but it is not a stimulator of demand in the housing market. This is still a very high level of interest, which makes financing homes difficult. Therefore, government programs facilitating the purchase of one’s own premises – like the current Safe Loan 2% – are much more important. Such programs should be a permanent element of state policy, as they ultimately have a positive effect on the country’s GDP, increase citizens’ sense of security, and support pro-family policies.

Andrzej Gutowski, vice-president, sales director at Ronson Development

The interest rate cut is pro-demand in nature and from the real estate market’s perspective, it is good news, both for clients and developers, as it will stimulate other groups of people who want to buy a house, increase interest in mortgage loans and strengthen the desire to invest in the real estate market. We see an activation of customers who have so far postponed purchasing decisions for various reasons, and who are not the recipients of the Safe Credit 2% programme. The crucial issue is whether the interest rate cut will be permanent and therefore have a long-term effect on the market.

Mariola Żak, head of sales and marketing at Aurec Home

Compared to the situation a year ago, the current sales of apartments are almost three times higher, and demand for loans is four times higher. This is the result of, among others, interest rate cuts, thanks to which mortgage installments are lower by even several hundred zlotys. However, the interest rate cut will probably not have such a major significance for people planning to purchase their own M in the near future. The standard program Safe Loan 2% is currently ruling the mortgage market, offering a fixed loan installment with 2% interest rate for the first 10 years.

Dawid Wrona, board member at Archicom

Considering the current market turmoil, every developer faces the dilemma of choosing between faster construction in response to growing demand and restraint and sensible approach to introducing new investments and establishing pricing policy.

It should be kept in mind that the process of introducing an investment to the market has extended from 2-3 years to even 5-7 years, and the success of the project is not guaranteed. We specialize in large, city-forming projects, which involve freezing capital of the order of PLN 150-200 million for many years. Therefore, in my opinion, the initiation of further investments should be approached wisely, based on market analysis, but also taking into account macroeconomic factors. At the same time, an additional challenge is to create a product that would meet the needs of buyers in the longer term.