The end of the year is conducive to diversion regarding various provisions or life decisions. Among the most important is the decision to buy your own apartment and the question whether it is now time to buy an apartment and take out a loan.
Real estate prices will fall further?
There are several market factors to consider when deciding whether to buy your own “m” loan. On the one hand, we currently have a buyer market, i.e. there are many apartments for sale on the market, more than willing to buy them. There is no better time than now to pick, whine and negotiate strongly. Sellers only at such times are more likely to discount, of course, depending on their determination in sales. On the other hand, you can always count on the fact that the longer this situation lasts, the prices may fall. Unfortunately, this is often an example of wishful thinking and the principle of the Stock Exchange works best here, which means that those who buy when everyone is still waiting and sell when everyone is buying win. Current property prices are the lowest in five years and it is difficult to predict that they will fall further. And even if it’s not much.
More favorable loans?
To a large extent, what shapes demand is the cost of credit and its availability. And here you should look for forecasts related to future events. The most talked about right now is of course the Family on Your Own program ending on the last day of December 2012. Every now and again we hear analyzes heralding the collapse of the real estate market. Is that right Absolutely not. The RnS program, despite its popularity, was an anti-market program and at the moment we do not really know what real estate market prices are. Developers who could sell apartments cheaper had the opportunity to inflate prices to statutory limits. Those who had higher prices came up with different ways to make apartments within the limits and at the same time to go out. The program was targeted at a specific group of recipients and for example completely bypassed families who were growing and would like to convert their small apartments into larger ones. Of course, it had a great impact on the market, because many people used it, but did not increase the availability of credit. In the vast majority of banks, borrowers’ creditworthiness was calculated in the same way as if they had taken a loan without any additional payments.
Other factors increase the demand for mortgage loans and so far these factors have not yet occurred, and everything indicates that they will occur. Firstly, the Polish Financial Supervision Authority is currently working intensively on loosening Recommendations affecting creditworthiness. And secondly, the Monetary Policy Council is lowering interest rates bolder. These two factors have a much greater impact on the market and credit availability than even the best administrative program. Loosening the Recommendation will increase the creditworthiness of all applicants for loans, and the reduction in interest rates means lower loan installments. And you won’t need more for the real estate market to revive.
Good time to buy real estate
When asked whether to take a mortgage and buy an apartment right now, the answer is yes. If the scenarios related to the actions of the Monetary Policy Council and the Polish Financial Supervision Authority are confirmed, their consequence will be an increase in creditworthiness, and thus demand for real estate. These changes will follow, because inevitably price increases. Despite the significant oversupply of flats at present, the situation may very soon be balanced. Especially since the housing needs of Poles are still unsatisfied and we are talking not only about those who do not have a flat at all. It is difficult to count, but there is a huge group of Poles who live in apartments that are too small. The potential for market development is powerful. And certainly it will not be increased by the now announced by the government program “Apartments for the Young.”
You can understand those who want to buy an apartment
But think that loans are currently too expensive. Yes, credit conditions are actually worse now than in better times. Banks change their offer in response to the market situation and recommendations of the Polish Financial Supervision Authority. Over the past six years, credit terms have been much better and worse than today. Credit terms can always be renegotiated in the future or the loan can be transferred to the bank where the offer is the best. Therefore, it is worth focusing more on taking advantage of the opportunity and buying a good property at a good price than waiting for the improvement of credit conditions. It might be too late then and the prices will be much higher.