Mortgage moves

Poland's market for mortgage loans is experiencing and will continue to experience a high level of prosperity, according to studies on the mortgage market carried out by consulting firm Mercer Oliver Wyman (MOW), and by the Gdańsk Institute for Market Economics (IBnGR).

Although growth in mortgages has been noted throughout the EU, reaching 11-12 percent every year, Poland, Romania, Bulgaria and the Czech Republic are seeing the fastest growth. According to IBGnR, by the end of the year, the total value of mortgage loans will reach zł.108 billion, and will grow to reach zł.248 billion by 2011.

According to professor Leszek Pawłowicz from IBnGR, Poland's mortgage market recalls that of Spain in the mid-1990s. "The Polish mortgage market is in the beginning stage of its transformation," he says.

A significant change in the market will be a rise in mortgage intermediary services,  the MOW experts predict. Currently, 20 percent of loans granted in Poland are done so indirectly, while in countries such as the UK, the figure reaches 60 percent.

"So far the selection of banking services was not wide enough to fuel the demand for an intermediary," says Pawłowicz.

Upcoming years will also see a decline in loyalty to banks, as more and more people are switch their loan providers. "This is a good trend," says Bartosz Chytła, vice president of Fortis Bank Polska. "The client is becoming more demanding," he adds, also stressing that banks, who so far have concentrated on expanding their client base, are now improving their customer relations. "Keeping a client is less costly than gaining one," says Chytła.

Among the challenges to the mortgage-loan market,  Pawłowicz lists a scarcity of land since only 15 percent of Polish cities areas have zoning plans, a lack of a sufficient workforce to build enough homes to meet demand, growing prices of building materials and rising prices of flats.

However, experts say the market is set to thrive despite these challenges. "The possibility that the market will collapse are close to zero," says Pawłowicz.