In December, the average prices of development apartments in some Polish cities were more than 20 percent. higher than a year earlier – reports rybprimotny.pl. An increase of 27% was observed in Trisis. increases (from PLN 11,794 to PLN 14,985 per square meter), in Krakow by 24%. (from PLN 12,545 to PLN 15,560), and in Warsaw 23%. (from PLN 13,634 to PLN 16,734).
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What will apartment prices be like in 2024?
– In 2024, the growth rate of prices should decrease significantly, as the demand will calm down. The increase will be at the annual level of up to 10 percent, but between 5 and 10 percent. – predicts Ewa Palus, chief analyst of REDNET Property Group in an interview with money.pl.
Our next interlocutor believes that forecasting this year is loaded with very high political risk.
I do not expect prices to fall unless the government abandons loans and rent subsidies and focuses on building affordable housing. Then there will be some reduction. However, I would put this scenario on the shelf of dreams – says Dr. Adam Czerniak, head of the Department of Institutional and Political Economy at the Warsaw School of Economics (SGH).
Jaroslav Sadovsky, chief analyst at Expander, expects prices to stabilize or decrease minimally in the first half of 2024 due to much lower demand compared to last year. According to developers, sales may be 5-15 percent lower.
– First of all, “Safe Credit”, which boosted sales, was stopped We will have to wait a few months for the new housing program. Secondly, the interest rates, which affect the availability of loans, will still be relatively high – the Expander analyst explains.
He said the slowdown could cover all of 2024, if there is one A new housing program Relatively few mortgage borrowers will qualify and interest rate cuts will be delayed until next year. From October 2023, the main interest rate that affects the loan rates is 5.75%.
Decrease in Europe, increase in Poland
– Because our incomes increased along with inflation, which increased the availability of apartments. Comparison: In Germany, both the rate of income growth and inflation were lower, so the decline in house prices had to be deeper to rebalance the market. In Poland, the sign of balance will simply be the stabilization of prices. And this, as I mentioned, was violated by “Safe Credit” – explains the SGH expert.
A paradox in the housing market
Developers look at this issue differently. According to them, thanks to the housing program, average prices will be lower than without it.
If the housing program continues, the average price of apartments should increase by about 7-10 percent. compared to last year, and if not – approx. 10-13 percent. – Konrad Plochotski, vice-president of the Association of Polish Development Companies (PZFD), appreciates.
As he explains, the continuation of the program will encourage industries to start new construction investments, which in turn will translate into the number of apartments from the popular segment built according to the requirements of the new program.
However, if there is no housing program, then – warns Płochocki – developers will build premium apartments for customers for whom the loan price is not so important. Adam Cherniak agrees.
On time Collapse of demand in the housing market, developers usually build only apartments for the rich. And this is happening in Poland too, and only a “safe 2% loan” was added to the developer's offer with cheaper apartments. Price stabilization will be ensured by maintaining the offer in the primary market of the six largest cities at the level of approximately 50,000. However, we are still far from this level – says the SGH expert.
Are developers bewitching the market?
According to JLL, a company that offers real estate for sale or rent, developers in Poland's six largest cities sold 35,000 in 2022. apartments. In 2023, these sales will be about 55-58 thousand. However, this is not much compared to 2021, when they sold 69,000. Apartments, that is, the record year in this regard was 2017, when 72,000 were sold. building.
We see no room for real estate prices to fall – both in the secondary and primary markets. For example, two weeks ago, one of the developers bought a plot of land in Warsaw's Ursinów district for PLN 8.5 thousand. PLN per square meter of the apartment. If we add the cost of construction, financing, indirect costs and the time needed to make the necessary decisions, the apartment will cost the end user between PLN 27,000 and PLN 30,000. zloty. Currently, the developer's standard in this area is about 20,000 square meters. PLN – says Konrad Plochotsky from PZFD.
In his opinion, there is no better evidence that there is a lack of investment land, and the industry's appeal to politicians on this issue is fully justified.
Our interlocutor believes that more availability of land is needed to stabilize apartment prices. He claims that developers don't have any apartments in stock to sell because the market is exhausted, they don't have enough apartments under construction, and they don't have plots with building permits.
“A real roller coaster”
REDNET's chief analyst adds that the housing market is very volatile right now.
All sectors need environmental stability, and the housing sector – so far – is the real attraction. With this product, the availability of which cannot be increased overnight, changes often have a negative impact on the sector – emphasizes Eva Palus.
In his opinion, the “safe credit” should be replaced by a new program in order to at least slightly ease the confusion and stabilize the environment.
– If the new program is really progressive – the conditions and extent of the aid will depend on the income or the number of children – it may have a neutral effect on prices at most or the positive effect may not be significant – says our interlocutor.
Karolina Wisota, journalist money.pl
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