In November 2023, developers operating on the 7 major markets introduced 6,400 flats for sale, an increase of 20% compared to October and over 200% more than in February when the lowest new supply was recorded this year. This is the third consecutive month in which the number of new offers increased. At the same time, sales of developer flats slowed down slightly in November, falling below 5,000. Data from Otodom Analytics suggest that while supply shortages are still visible, the housing market is slowly reaching equilibrium.
In November, we saw exceptionally high activity from developers. The 6,400 flats introduced for sale during the month represents one of the highest results recorded in recent years. In the past, such clear increases in supply usually preceded the implementation of legal changes affecting the activities of development companies and were motivated by the desire to launch investments under “old rules”. Was this the case this time around, with the dwindling funds for 2023-2024 from the Safe Loan 2% program serving as an additional motivation?
– The Safe Loan was just an impulse, not the driving force, responsible for the current results in the housing market. It is clear that some investments – those cheaper ones – were launched with purchasers who could benefit from government funding in mind. However, a large proportion of these flats, which have just bolstered the developers’ offer, do not qualify for the program and would not have entered the market without a clear price increase. Why? Because at the planning and cost negotiation stage it was difficult for developers to ensure adequate project profitability. – comments Katarzyna Kuniewicz, director of market research, Otodom Analytics.
The expert also emphasizes that the November increase in supply is a continuation of the trend that we have been observing for several months and is rather the effect of many months of hard work on project contracting than fear of the program being discontinued.
– This is not the first sales support program that the development industry has encountered and it is hard to assume that in a mature business anyone would want to build a company strategy on its own. The uncertainty associated with elections and a potential change – or not – of the political option, and with it the stability of the law and decisions concerning the market, had much greater impact on the decisions of developers and investors. – adds Katarzyna Kuniewicz.
Uneven situation in cities
In November, sales of developer flats in the largest cities fell compared to the levels recorded in recent months. While the result of 4.9 thousand apartments was 9% weaker than in October, it still exceeds last year’s result by 97%. Paradoxically, this is good news for buyers. The predominance of the number of apartments introduced for sale over the sold ones gives hope for a slowdown in the turnover rate, a larger selection and a slowdown in price growth. At the end of November, the offer available on the 7 main markets amounted to 39.4 thousand, thus returning to the level from the beginning of August. Although aggregate data suggest that we can expect a calming period, the situation in individual cities is still very varied.
In November, a balance between sales and new market entries was recorded in Warsaw, Wroclaw and Tricity. In Poznan, there was a sales surplus of 40%. Meanwhile, in other cities, developers introduced more new offers than they sold – in Krakow by nearly 50%, in Lodz by over 100%, and in Katowice by as much as 186%.
Looking at the order clearance time on individual markets shows that no serious change has taken place. Buyers in Krakow still find themselves in the most difficult situation. If the interest in buying there remained at the level of the last 3 months, and no new projects were added to the offer, the apartments offered by developers would sell out within 4.5 months. The situation is slightly better in Warsaw and Wroclaw (1.8 and 2 quarters) and Tricity (2.3 quarters).
– Usually, a market is considered balanced when the time to sell the supply is 5-6 quarters. In November, only Katowice and Lodz could be considered as such. Both the increasing number of new flats being introduced and data from the Central Statistical Office about the increase in developer building permits and number of construction starts suggest that developers are striving to stabilize the offer at a clearly higher level than in 2023. In Polish conditions, speeding up these processes is not easy, as evidenced by the fact that we had to wait over half a year for a significant improvement in supply. –  emphasizes Katarzyna Kuniewicz from Otodom Analytics.
Short or long term stabilization?
Despite a slight decrease in sales in November, the number of reservations for new flats allows us to assume that in the coming months sales will continue to remain at a high level. As indicated by Otodom Analytics data, in November, 2.8 thousand flats obtained the status of a flat reserved with developers, which is 72% more than a year ago. At the end of November, there were a total of 8.7 thousand such flats on the 7 main markets – the last time such values were recorded in mid-2021.
This in turn means that price drops are difficult to expect. According to the latest Otodom Analytics data, in November 2023, for a square meter of flat, one had to pay an average of PLN 16.2 thousand in Warsaw, PLN 14.7 thousand in Krakow and Tricity, PLN 13.1 thousand in Wroclaw, PLN 12.3 thousand in Poznan, PLN 11.6 thousand in Katowice and over PLN 9 thousand in Lodz.
In annual terms, Krakow remains the leader of growth (+23%). In turn, the least, because by just under 10%, the average prices of flats sold in Katowice rose. However, it was Katowice that was the market where flats became more expensive the most, by 3% compared to October this year.
