(Bloomberg) -- Poland's biggest homebuilder sees more clients turning to cash to buy new apartments after a series of rapid interest-rate increases sparked a collapse in sales.
Dom Development SA, the country's biggest housing developer, sold 30% fewer homes in the first quarter compared to the same period last year, a similar decline to one experienced by its rival, Atal SA. Cash-only transactions accounted for 58% of all Dom Development sales last quarter, the company said.
Home buying rebounded in March as Poles rushed to obtain mortgages before tougher credit criteria came into took effect this month, pricing some of them out of the market. Dom Development Chief Executive Officer Jaroslaw Szanajca predicts that while limited access to loans will keep demand for cheaper homes weak, more people will decide to invest their savings in apartments.
“Despite the rate hikes, the real interest on savings accounts remains deeply negative,” he said in an email. “Combined with inflationary fears and influx of refugees from Ukraine this should fuel demand for apartments in the future.”
Poland's central bank is expected to lift interest rates again on Wednesday after inflation accelerated into double digits in March. The borrowing costs have risen by 340 basis points to 3.5% over the last six months, causing an even bigger spike in interbank Wibor rate, a benchmark for most loans. The average interest on savings account, meanwhile, has remained close to zero, the central bank's data show.
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