# The average earnings of Poles are not enough for a loan for housing in a large city

Poles’ earnings are growing, but their creditworthiness is rising – experts warn. In the largest Polish cities, an average salary may not be enough to take out a loan for an apartment. Couples and residents of smaller voivodship cities are in a better situation, where prices per square meter are definitely lower than in e.g. Warsaw or Krakow.

Although the earnings of Poles are statistically better and better – according to the Central Statistical Office data in July, the average salary was USD 4,291 – the reality is a bit less colorful. The average salary is so high because it is overstated by the high salaries of presidents or directors.

## A better indicator seems to be the median

Which divides all the values in half – in July it was about 3434 USD gross, i.e. almost 2.5 thousand. USD “on-hand”. A larger sum feeds accounts for approximately half of Poles every month, while the other half earns less.

For comparison, according to Good Finance data, the average transaction price of a square meter of a flat in the first quarter of 2016 on the seven largest housing markets (including Gdańsk, Kraków, Warsaw) is USD 5,649. This is the sum of more than twice as much as the median salary.

This price is so high that people with a salary equal to the median cannot afford to buy a 40 sq m flat financed by a loan – says Jarosław Sadowski, chief analyst at Good Credit – Given that it can be obtained at a maximum of 90 percent. property value and that the average interest rate on such loans is 4 percent, it turns out that the installment would amount to USD 1 073, or as much as 44 percent. such as average income. Meanwhile, in most banks, this ratio must be lower than 30 percent, and only a few institutions allow it to slightly exceed this level – adds the expert.

Calculations for residents of smaller voivodship capitals, such as Szczecin, Lublin or Białystok, are more optimistic, where the average cost of a square meter (calculated jointly for ten smaller cities) is according to Good Finance 3,870 USD.

## It is enough, though with difficulty, to take out a loan

The installment for a 40 sq m flat would then amount to USD 735, or 30% of income – says Jarosław Sadowski.

However, loans are often taken out by couples, which makes things easier. – Let’s consider marriage with an income equal to twice the median. Assuming that the purchased apartment has 60 sq m, in the largest cities the installment of a family commitment will amount to 33 percent. income.

With difficulty, but you can find a bank that will grant such a loan. In cheaper locations, the installment will amount to 22 percent earnings, so it will be at a level that will allow you to get a loan freely – argues Sadowski.