Low availability of land and their high prices mean that housing prices continue to rise. We should not count on price drops before autumn, but the first signs of a slowdown in the real estate market may be visible already in July. All because of fewer loan applications submitted in May. Bolder experts even predict a bear market in their judgments – next spring.
Market experts in the coming months, however, do not announce major changes on the housing market. As much as 74 percent of them believe that price increases will continue.
In May, the index values for Warsaw and a group of large cities also increased. The index for the capital was 102.66 points. and was by 0.53 points higher than in April. In relation m / m, the index for large cities also increased, which in May reached 103.52 points. (increase by 0.15 points). Both indexes in annual relation increased by about 5.5 points.
Small apartments for the price
As noted by Tomasz Błeszyński, real estate advisor and president of the Federation Agreement on the Polish Real Estate Market, in May transaction prices of one- and two-room apartments with functional layout and good location increased.
– Such flats are always attractive for investment and subsequent development. The last six months is a time of wrestling in the price market and constant testing whether buyers are able to accept even higher prices
In the opinion of experts, good dynamics of sales of flats is also constantly maintained, with approx. all apartments are bought for cash. These are mainly flats purchased for investment purposes – for rent.
– Apartments for rent are bought without a discount. This means that the housing market is still promising, especially in large cities and where jobs are created – says Małgorzata Kosińska President in REIT – Polish Association. – The upward trend is sustained by high land prices and relatively low availability of land for development – he adds.
Price drops in autumn, spring in the spring
At least until autumn, we should not expect spectacular price drops. All because of low interest rates and high construction costs.
– The primary market will still be flooded with development projects on which investors will try to gain large margins. In turn, the secondary market will continue to follow the primary market in terms of prices. – However, the fall of the housing market will see a wave of slowdowns and price adjustments that will result in the beginning of the bear market next spring.
Less willing to borrow
Two-thirds of apartments in Poland are bought on credit. Although in May, according to the Credit Information Bureau, both the number (by 14.2%) and the value (by 24.8%) of granted housing loans increased, a possible slowdown on the housing market is suggested by other data published by BIK. In May, compared to last year, the number of housing loan applications dropped – from 37 to 31 thousand. Whether lending really stops, it will turn out in July at the earliest, because the procedure for starting the loan usually lasts one to two months.
– At the end of April we celebrated on the occasion of Easter, and soon the Poles went to the picnic. Some even combined these two opportunities and devoted themselves to a very long rest. Effect? At the end of April and beginning of May, fewer people were looking for flats, but there were fewer employees of banks, developers or intermediaries at work. This obviously negatively affected the demand for flats. – Even if someone immediately after returning from the picnic went to look for an apartment, before he found a place, negotiated the price and collected all the documents needed to submit a loan application, it could be June – he adds.
Land will be cheaper?
After the April reduction, the level of 130 points exceeded the urban.one index for built-up land again. The index increased by 0.38 points. and in May it amounted to 130.04 points Compared to May last year it was by 1.83 points. higher.
Given the limited supply of land and their high prices, however, a light appeared on the horizon in the tunnel for buyers. In the opinion of experts, the hope of lowering prices may be the release of land blocked until recently within city borders – it will be possible thanks to the amended act on shaping the agricultural system, which came into force on June 26.