How real estate behaves in Poland: prices of new apartments
The real estate market in Poland shows good growth dynamics, but each segment behaves differently. Demand for housing is growing and there is a large number of new buildings. On the one hand, it allows balancing supply and demand, but on the other hand, it is not always profitable for investors. Experts say that primary real estate in Poland and its price are fixed at one mark and do not grow.
Such stagnation does not mean that there is a crisis, but it deserves a detailed analysis. Last year, the price of apartments at the primary market grew by 15%. In July 2018 the price of a square meter in a new building was higher by 1% than in April of this period. In 16 major cities in the country, including Warsaw and Krakow, the increase in value was not recorded, and in Katowice and Gdansk rates decreased by 1-3%. In Lublin, on the contrary, the price increased by 7%, and in Wroclaw – by 4%.
Experts speak differently about this situation. Some say that the market is entering a period of stability and a great growth should not be expected. Others say that there will still be a price increase, but in the long term.
The lack of dynamics alerts both sellers and buyers. Everyone is cautious about what is happening and does not rush to decisions.
If we consider the factors that affect the market, we can distinguish a few, but first of all it is the complication of mortgage conditions. Interest rates and demands on borrowers are increasing. However, the number of applicants is not decreasing. In the summer there were 15% more loans than last year. Now, a family of three, whose income is 5 thousand zlotys can take a mortgage of 306 thousand zlotys. Even 4 years ago, under the same conditions, consumers could count on the amount of 150 thousand more.
Difficulties in obtaining a loan are due to the desire of banks to insure themselves against possible losses. The fears of financial institutions cause trends in the global economy, which is experiencing recession. This is forcing banks to raise credit rates. For example, in April their value was 3.62%, now it is 4.22%. According to the NBP, it is planned to further tighten credit policy by the end of this year. The situation is saved by the stable growth of wages, so the number of loans is not decreasing.
Analyzing the real estate market in Poland and its prices, it is worth noting that supply is decreasing. If in 2016-2018 there was a construction boom, now it is quiet and investors are not in a hurry to invest in new projects. Many are afraid of a repeat of the 2008 crisis, when in a short time there was a collapse of prices and developers lost money.