Developers have been pleading with the Financial Supervision Bureau for some time to loosen the rules for granting mortgage loans. There is currently a 5% buffer for this segment. what does that mean? This was recommended by the Polish Financial Supervisory Authority For banks to calculate creditworthiness as if interest rates will increase another 5 pages.
UKNF targets developers’ profit margins
As it turns out, the watch is not silent about these warnings. In the announcement published on its website, the bureau asserts that “for some time, it has been noticing the increased activity of developers and analysts associated with them in the media” regarding With the deterioration of the situation in the construction market and themselves. The KNF notes that this is related to the lower creditworthiness of potential apartment buyers, and is “mainly the result of KNF expectations regarding creditworthiness check rules by banks.”
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In response, the KNF confirms that The housing market is mainly affected by apartment prices. In addition, it is also affected, among others, the supply, energy prices or prices, the availability of building materials, qualified personnel as well as the developers’ margin policy.
If the developers are really interested in the availability of housing for young Polish people, they have the option to adjust their margin policy. – UKNF points in advertising.
go on to say that Average gross profitability development sector On sales for 2021 it was 31 percent.while In the first half of 2022 – 29.4 percent These data were based on the results of the entities listed in the regulated market and in the alternative trading system, i.e. 13 companies from the regulated market and two companies from New Connect.
Similar “disturbing” arguments to the Swiss franc loan narrative
Furthermore, the regulator stresses that the assumptions for easing the prudential policy are currently being formulated by the sector. “It seems particularly disturbing in the context of a similar historical discussion about the availability of loans denominated in or indexed in Swiss francs.” of 2006, which the authority attempted to limit with recommendations from Recommendation S.
like today Then the surveillance activities were deemed particularly severe on young peopleDeprived of the possibility of realizing the dream of owning an apartment. It was pointed out that Recommendation S restricts competition in the Polish credit market in a very serious way. The protests and social campaigns began under eloquent headlines today, such as: ‘Freedom to dream, freedom to get credit’ or ‘We want to take risks’ – writes the UKNF.
The KNF office mentions this with the negative consequences of the so-called history of Borrowers in Swiss Francs We measure ourselves to this day, and “it’s worth drawing conclusions from history”, especially since then Today there are no developers that “suffer the consequences of materializing the risks of mortgage loans in Swiss francs”. Finally, the regulator emphasizes that its role is to “take care of the stability and security of the Polish financial sector, including the banking sector”, and therefore also Client.
Since the UKNF . recommendation New and significant risk factors have emerged and developed, and the market situation has not changed enough to be justified by banks moving away from increased caution. When assessing the creditworthiness of a potential mortgage borrower. The recommendation regarding the assumptions made in the creditworthiness assessment process regarding the minimum possible change in the level of interest rates is fully consistent with the current recommendation S and aims to reduce the level of credit risk assumed by banks in connection with the increasing costs of debt servicing by borrowers ”- emphasizes the desk.
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