CEE Household Lending Picks Up Pace Amid Rising Wages and Low Inflation

Household lending in Central and Eastern Europe (CEE) is experiencing a notable uptick, driven by rising real wages, easing inflation, and competitive mortgage rates. According to regional central banks, new housing loans in Poland rose by nearly 12% year-on-year in the fourth quarter of 2025, while Czechia saw a similar increase in mortgage applications as property prices stabilized.

The trend is observed across several CEE economies, including Hungary and Romania, where government subsidy programs and wage gains have supported demand. However, this growth is more measured than the pre-2022 boom, when ultra-low interest rates fueled rapid credit expansion. This time, banks are applying stricter underwriting standards, reducing the risk of a credit bubble.

The International Monetary Fund has advised regional governments to maintain macroprudential buffers to guard against potential shocks. Regulators are enforcing prudent lending standards, and debt levels remain below the eurozone average, suggesting the current pace is sustainable if economic conditions hold.