The Feasibility of Estimating the Demand

for Residential Mortgage Credit in Poland

19

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Market Surveys

  The probability of applying for mortgage and/or consumer credit

  The financial, socioeconomic, and geographic characteristics of applicants

  The determinants of the amount of credit applied for, etc.

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Housing Preference Models: Hedonic Models (the demand for housing,

building, and locational attributes)

Tables 3 and 4 provide a reference to the types of macroeconomic and

microeconomic models and estimations, the general types of data required by each, their

major uses, and brief comments with regard to their priority for Poland.

3.2

Issues in Model Structure and a Brief Review of Studies of Mortgage Credit

The Demand for Housing and the Demand for Mortgage Credit

Clearly, many of the decisions involved in becoming a homeowner and whether

or not to do so with mortgage credit are interrelated, including the probability of moving,

the amount of housing services desired, the probability of applying for and receiving a

mortgage loan, and the amount of mortgage credit.  As noted in section 2.0 with regard to

the United States, although closely related to the demand for housing, the demand for

mortgage credit is an independent variable in its own right.  

We hypothesize that in

transition countries, the link between the demand for housing and the demand for

mortgage credit is perhaps even more complex than in the United States.

  In the first

instance, there may be a substantial lag between the growth in income in Poland and the

demand for housing (longer, that is, than in the United States or the United Kingdom, for

example).  Secondly, there also appears to be a lag as well as the numerous

barriers between the effective demand for housing and the use of mortgage credit.

Clearly, many households buy homes (or privatize their current units) without recourse to

mortgage credit or with low LTVs many more than in most developed countries.  Thus,

the specifications and/or results of several of the quantitative models will differ between

Poland and the United States not only the demand for housing but, perhaps even more

importantly, the probability of trying to obtain mortgage credit and the amount of credit

desired (or offered) if the application is made.