Poland is one of the countries where apartment prices increased the most in the second quarter of this year. Meanwhile, prices in Germany have fallen for the fourth quarter in a row. House prices in the UK are falling for the fifth month in a row.
According to the data of the website sklepprimotny.pl, in September the average price of a square meter in Warsaw exceeded PLN 16,000. PLN, which means an increase of 17%. compared to the beginning of this year. In Krakow, the average price per square meter exceeded the barrier of PLN 15,000. PLN (in this case there was an increase of as much as 21% compared to the beginning of the year). Over the last decade, real apartment prices in the capital have increased by almost 40%.
Apartment prices in Poland are up
– Solid employment prospects, expansion of the metro line and modern housing estates kept the market attractive. However, in the context of persistently high levels of inflation, mortgage rates have risen sharply, reducing households’ willingness to purchase homes. After adjusting for inflation, this led to a drop in prices by approximately 10%. from mid-2022 and shifted demand to the rental sector, which is experiencing strong growth. However, a new program of cheaper mortgage loans has recently led to an increase in demand – wrote in the analysis of this year’s edition of the UBS Global Real Estate Bubble Index report.
Business Insider Polska quotes experts’ opinions according to which, when the potential of the cheaper mortgage loan program ends, one of the important engines of price growth will go out.
– Many people were afraid that the launch of the cheap loan program would result in the offer being overbought and apartment prices increasing. To avoid this, Poles started buying apartments before the government program was launched. The result was that the offer was actually bought out and prices went up – comments Michał Sapota, owner of HRE Investment Trust, quoted by the website.
Declines in the West
Meanwhile, in Western Europe, housing prices are currently falling. Data presented a week ago by Eurostat show that housing prices in the EU in the second quarter of this year. decreased by 1.7 percent on a quarterly basis. This is the first such decline since 2014. Year to year, prices are on average 1.1% lower. The largest declines were recorded in Germany (-9.9% yoy), Denmark (-7.6% yoy) and Sweden (-6.8% yoy). Poland is among the countries where the prices of premises have increased the most (an increase of 7% y/y).
Prices in our western neighbors are falling for the fourth quarter in a row, which means the longest downward series in the EU. We also have declines outside the EU. According to mortgage provider Halifax, UK house prices fell for the fifth month in a row in August and at the fastest annual pace since 2009. (in August, the decline was 4.6% year-on-year, and compared to July, there was a reduction of 1.9%). The main reason is the increase in mortgage interest rates. We are therefore dealing with a decline in demand. A typical house in the UK currently costs an average of £279,000. 569 pounds, i.e. less by approx. 14 thousand. pounds year to year.
The above-mentioned UBS Global Real Estate Bubble Index report proves that many global housing markets experienced sharp declines in prices and several bubbles burst. For the purposes of the study, residential property prices in 25 global financial centers were analyzed. From the middle of last year to the middle of this year, real prices of metropolitan real estate recorded an average decline of 5%. According to analysts, further price decline is likely. The report – according to Business Insider Polska – indicates that the main reason for this phenomenon is the increase in inflation and, consequently, interest rates. This limits the demand for apartments, so suddenly the available supply turns out to be too high for the market capacity. As a result, developers and sellers on the secondary market must lower prices to find customers for the apartments they sell, instead of counting the costs of maintaining empty premises.
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