The Feasibility of Estimating the Demand

for Residential Mortgage Credit in Poland

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problem, they do not define demand that is, what can be afforded by

households in Poland at the present time.  One of the studies reviewed did, in

fact, estimate what level of housing could be afforded given assumptions about

growth in GDP and the use of mortgage credit; however, the income elasticity

estimate was derived from studies in other countries because data do not yet

exist in Poland to derive an internal estimate.

For this reason and others, we recommend below that the necessary household 

level data be made available, and formal statistical models should be estimated.

The models may need to be modified, however, to obtain better results for

Poland and other transition countries that is, to take better account of the

barriers between potential and effective demand.

1.2

Summary of Recommendations

A number of recommendations are offered to assist Poland to quickly enhance its

ability to analyze the demand for housing and the demand for mortgage credit.  In the first

instance, better measures of the market value of the housing stock and annual production

must be developed. Second and most important, Poland should develop an ongoing

household (microeconomic) survey to obtain housing and financial data.  Variables

representing the important factors in housing and credit decisions could then be made

available, including household income and assets; other determinants of household

preferences; financial and economic indicators; factors underlying mobility; the market

price of housing; unit quality and locational features, and household preferences for those

features; the demand for consumer durables; the demand for financial assets; and so forth.

In summary, it is suggested that Poland should undertake the following:

!

HUDA Research and Policy Analysis Division

.  HUDA could greatly benefit

in its policy analysis efforts if its technical staff had more access to data to

support their analyses.  Development of the appropriate surveys, information

systems, and databases is a long term effort, but well worth it.  We recommend

that HUDA establish a division specifically devoted to preparing for, and

undertaking research on, a variety of housing issues, including estimation of the

demand for housing.  The HUDA Research Division would also be responsible

for design and analysis of the household survey recommended below.

Implementation of the survey could be undertaken in conjunction with GUS.

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!

Household Survey of Housing and Consumer Finance.

  It is recommended

that Poland develop a long term, ongoing survey  Survey for Housing and

Consumer Finance,  for example.  The survey could be conducted annually, or

5

The UIC team has also made the same recommendation formation of a HUDA Research Division in

our report  Public  Sector Housing Finance Strategies for Poland.