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Mar 14, 2023
Poland Backs Debut Homebuyers as Mortgage Gloom Stifles Demand
(Bloomberg) -- Poland’s government approved a plan for mortgage subsidies aimed at reviving the country’s ailing housing market ahead of a general election slated for the fall.
The regulations, expected to take effect in July, will let first-time homebuyers keep annual interest on their mortgages at 2% for the first 10 years of the loan’s life. That compares with the current market rate of over 9% as Poland raised its key rate to 6.75% from near zero in 2021 to battle runaway inflation.
Lack of access to affordable housing has become a political topic as sales of mortgages halved in 2022, while home builders halted new projects. The largest opposition party, Civic Platform, called for interest-free home loans, also subsidized by the state.
READ: Poland’s Mortgage Gloom Deepens With Loans Set for 18-Year Low
The government estimated the cost of the subsidies at around 16 billion zloty ($3.7 billion) cumulatively over the next 10 years. The draft bill needs to be approved by parliament and signed by the president.
People under the age of 45 will be eligible, and only those who don’t own and have never owned an apartment or a house before. Mortgages could be as large as 600,000 zloty. They can be taken out for purchases both in the primary and secondary market.
(Adds more details of the program in paragraphs 4-5)
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