The sale of new homes in Poland’s seven largest markets in September 2023 amounted to 5,4 thousand. At the same time, property developers introduced 4 thousand units onto the market. Despite this being a clear 34% increase compared to August, it is hard to bridge the increasingly large gap between demand and supply. Since the beginning of the year, developers sold nearly 13 thousand more apartments than they introduced for sale, and the demand driven by the 2% Safe Mortgage program is harshly siphoning off options from the secondary market as well.
Since June, sales in the primary market has maintained on a similar level of 5,4 thousand units sold monthly in the seven largest markets. Through the three quarters, developers operating in Warsaw, Krakow, Wrocław, Tricity, Poznan, Lodz, and Katowice sold 41,4 thousand apartments, which is over 9% more than in all of 2022. However, only 28,6 thousand units were made available for sale, which is over 10 thousand less than in the previous weak year for the housing market, and over 45% less than was sold from January to September 2023.
The availability of developer apartments has fallen to a level similar to late 2021, which was a post-pandemic boom period. Back then, nearly 6 thousand units were being made available for sale monthly, and sales fluctuated between 4,5 – 4,7 thousand units. Today, these proportions have reversed. We spoke about the process of hoarding demand and the flight from savings accumulating during the pandemic to real estate. Today we are dealing with the mobilization of demand. – comments Ewa Tęczak, a real estate market expert from Otodom.
According to Otodom’s expert, this translates into a fever that artificially inflates prices. The prices in the primary market alone have risen by 15% in Tricity and up to 23% in Krakow on an annual basis. Today, the average prices of apartments on the developer market are 15000 PLN/sq.m in Warsaw, 14,4 thousand PLN/sq.m in Krakow, 13,4 thousand PLN/sq.m in Gdansk, 12,4 thousand PLN/sq.m in Wroclaw, 11,7 thousand PLN in Poznan, 11,0 thousand PLN/sq.m in Katowice, and 9,2 thousand PLN/sq.m in Lodz.
Those interested in buying apartments in Krakow are in the most difficult situation today. Not only are the average offer prices already exceeding 14 thousand PLN/sq.m and it was at the end of September 23% higher than a year ago, but the choice of apartments available for purchase is 51% lower than in September 2022.
The theoretical sell-out time, which is about 4 quarters for a balanced market, has now dropped to 1,4 quarters, which means that if the current scale of demand continues, the available offer could sell out within 4 months.
Even in cities like Lodz or Katowice, where increased developer activity at the turn of the year could give grounds for greater caution when launching new investments, buyer interest balances the large new supply for these markets. – comments Katarzyna Kuniewicz, director of market research at Otodom Analytics.
Experts agree: The unusual demand that destabilizes the market has its source in the government’s program of subsidies for the purchase within the framework of the First Apartment program. However, given the still low pace of applications being processed by banks, developers’ caution is somewhat justified.
These factors together contribute to the decrease in availability of such apartments. Regardless of whether these units’ total price is within the limit of 800 thousand PLN or not, Generally amidst low new supply, the offerings of apartments shrink, simultaneously, prices are rising, which means smaller and fewer of them would be available for purchase with the support of the government subsidy. – comments Ewa Tęczak, expert from Otodom.
On average for all cities, the price of 1 sq.m of apartments which can still be bought with the support of BK2% on the primary market of the 7 largest cities has increased over the last 9 months by 900 PLN from 10.6 thousand PLN/sq.m. to 11.5 thousand PLN/sq.m. In January you could buy on average 51.5 sq.m for this amount. Today it is on average less than 49 sq.m.
The most significant decrease of flats within the total price of 800,000 PLN occurred in Krakow (-65% compared to January) and Warsaw (-47%). There was, however, an increase in Katowice and Lodz (9% each compared to January).
