Rebound in Mortgage Approvals and Favorable Cost Trends in Housing Market
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Recovery in mortgages
According to BIK and NBP data, the number of granted mortgages increased in June for the first time since December 2021. In our view, the rebound was driven by: 1) easing of the cushion in calculating creditability, and 2) a low base from 2022.
Thus, the volume of granted loans grew by 6% y/y. Moreover, the average loan value presented a single-digit y/y increase (+6.6% y/y). We highlight that the number of submitted motions surged in m/m terms in July due to start of low-cost mortgage program (concurrently, we note that even excluding the impact of the program, the numbers would indicate a solid double-digit increase in y/y terms).
Favourable trends on the cost side
We point out that according to the latest developer statements, the vast majority of construction costs have stabilized or even decreased. Taking into consideration the recent Budimex investor presentation, reinforced steel prices fell by 21% y/y and by 7% q/q (the data correspond with rebar indices presented by Bloomberg, which indicate a drop of even 50% y/y). On the other hand, concrete prices are still significantly higher in y/y terms (PSB reported that prices grew by 24% y/y in Jul23). We note that there is still low availability of land plots, which may place pressure on margins in the long-term. According to Statistics Poland data, the average salary in the construction segment increased by nearly 8% y/y.
