Customers are not waiting for a “Start-up Credit.” How to explain higher housing prices?

• The average prices of new apartments in 11 of the 15 largest cities in Poland rose slightly in August. However, in none of these markets did developers raise prices in existing projects. The increase in average prices was caused by new, more expensive supply.

• Apartment sales are growing, albeit slowly (+10.3%), for the second month in a row. Customers no longer believe in the “Kredyt na start” program. Those who waited have lost hope and are deciding to buy now, taking advantage of holiday promotions.

• There is a visible revival in the investment housing market. Sales of small apartments are growing faster, it seems that investors have come to believe that there is no chance of any real program to support the purchase of apartments, so there will be demand for renting small premises.

It seems that in August, customers finally lost faith in the start-up loan program. Some of those who waited to buy decided that there would be no support and it was better to buy now, when there was a large selection and you could negotiate a discount, than to wait for a support program that may never come.

High supply of new apartments

New projects introduced by developers to the market in August have increased the average prices per square meter of new apartments in most cities in Poland.

The largest increase in the average price was recorded in Wrocław (+2.8%), where several projects in more expensive locations were introduced for sale. However, it is worth saying clearly – a detailed analysis of developers’ price lists shows that they did not increase the prices of apartments, and the increase in the average price is a statistical effect of new, more expensive supply and the fact that cheaper premises were sold, so the unsold (more expensive) ones increase the offer price.

This situation occurred in every city where the average price per square meter increased – in Lublin (+2.0%), Kraków (+1.9%), Bydgoszcz (+1.4%), Rzeszów (+1.3%), and in Warsaw (+0.9%) and Toruń (+0.6%). Only in Kielce was the opposite (-0.5%), where the price drop resulted in turn from cheaper, new supply. In the remaining cities, prices were stable and fluctuated between -0.3% and +0.3%.

Where is the most expensive and where is the cheapest?

Currently, the most expensive city in nominal terms is Warsaw, where the average price per m² is PLN 16,986/m2, followed by Kraków 15,864/m2 and Gdańsk 14,690/m2. The cheapest city is Radom – PLN 8,606/m².

On the other hand, there are small price increases in towns that are part of the agglomerations of the largest cities. The average price per square meter increased in all agglomerations, the most in the Warsaw agglomeration (+0.9%).

The general conclusion is therefore as follows: prices are stable, and changes result almost exclusively from changes in the structure of the offer. However, this will ultimately lead to price increases, because this change means a smaller choice of cheaper apartments.

– The price stabilization we predict is beneficial for the market. Customers have time to choose their dream apartment, and developers can plan the sales process – analyzes Robert Chojnacki, founder of the portal Tabelaofert.pl.

In his opinion, growing sales mean that customers no longer believe in the “Kredyt na start” program and would rather “bleed out” on the very high costs of credit resulting from the absurdly high margins of banks than wait for a program that may not exist and pay for rent while waiting.

– On the other hand, investors who buy to rent are slowly returning to the market – for them, the receding prospect of support for the purchase of apartments is a guarantee of demand for rental, because after all, you have to live somewhere,” adds Robert Chojnacki.

“Start-up loan” without support

The future of the subsidy program is indeed unclear. The Ministry of Development and Technology assures that it will present the project any day now, although it is also clear that there is no majority support for it in the Sejm (unless PiS MPs decide to do so, considering it a worthy successor to the “Safe 2% Credit” program). We write more about the doubts in the texts below.