The Feasibility of Estimating the Demand

for Residential Mortgage Credit in Poland

5

Quantitative models of housing demand, on the other hand, are data based

estimates of the basic parameters that drive the demand for housing in any specific

country or region.  It is these estimates that Poland is lacking at the moment, basically

because the necessary data are not yet assembled.  For example, the demand forecast

study referred to above used assumptions about demand elasticity based on parameters

estimated in countries other than Poland.  While this is a useful first step, Poland needs

to undertake its own estimates, especially since the  emergence from transition  paradigm

is unique and not yet well understood.

Thus, to contribute to a better understanding of the types of demand studies that

are traditionally undertaken, as well as alternative approaches that might be considered,

this study will address the following topics:

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The methodologies for macroeconomic and microeconomic demand studies and

how they might need to be reconsidered in transition countries because of the

gap between potential and effective demand.

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An assessment of the macroeconomic and microeconomic data now available

in Poland and whether these data are appropriate for model estimation at the

present time.

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An assessment of approaches to modeling that might be relevant to Polish

policy makers, banks, and gminas.

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Recommendations for next steps in estimating models of demand.

1.1

Summary of Major Findings

At the present time in Poland, estimation of formal econometric models of the

demand for housing and the demand for mortgage credit is not feasible.  The problems in

estimation have mostly to do with lack of appropriate data.  In addition, however, because

of barriers to making the potential demand for housing and/or credit effective a problem

not unique to, but very pronounced in, transition economies the models traditionally used

for estimation may need some modification. The UIC team considers that it is important,

however, for Poland to gain a more precise understanding of the role of housing in the

economy both in terms of economic aggregates and household behavior to better

assess its macroeconomic role and to design optimum housing subsidy policies.

We feel that many groups, both public and private will benefit, including the Ministry

of Finance; the National Bank of Poland; the Housing and Urban Development Authority;

many private institutions, including banks, developers, builders, and the real estate

industry; and finally, research foundations and professional associations, such the  the

Polish Banks Association, the Foundation for Mortgage Credit, the Housing Research