Home buyers may have a problem. Experts point to a disturbing trend

Average offer prices of new apartments on the largest markets in Poland generally remained stable in August. The exception was Warsaw, where the average price per square meter dropped for the second month in a row. However, a change in the average does not automatically mean price reductions by developers. The structure of the available offer is becoming more and more important.

– August brought stabilization of average prices of new apartments in the largest markets. In six out of seven metropolises, the average price per square meter remained at a level similar to July’s. The exception was Warsaw, where it dropped for the second month in a row. Apartments with the lowest prices are becoming less and less available throughout Poland, notes Marek Wielgo, an expert at the RynekPierwotny.pl portal.

Warsaw sees a drop in average prices again

According to preliminary data from BIG DATA RynekPierwotny.pl, in August the average price of a square meter of apartments offered by developers in Warsaw decreased by 1%. and amounted to 19.6 thousand zloty.

In the remaining largest markets, monthly changes were minor. The average price per square meter reached PLN 17.3 thousand. PLN in Krakow, 17.9 thousand PLN in Tricity, 15.9 thousand PLN in Wrocław and PLN 14.3 thousand PLN in Poznań. In Łódź it was 11.6 thousand. PLN, and in the Upper Silesian-Zagłębie Metropolis – PLN 11.2 thousand. zloty.

– At first glance, it may seem that not much is happening on the market. However, it is worth taking a closer look at what is behind the changes in the average price, says Marek Wielgo.

In the case of the capital, the key turned out to be not so much lowering the prices of apartments already on sale, but changing the structure of the entire offer. In August, developers introduced a larger number of units from the popular segment.

The average price of new apartments in this part of the market was PLN 16,400. PLN per square meter, so it was clearly lower than the average for the entire Warsaw offer. A larger share of cheaper apartments resulted in a lower average for all apartments available for sale.

– In this case, the drop in the average price in Warsaw is not a signal of a widespread decline in apartment prices. This is primarily the result of relatively cheap premises being included in the offer. It’s worth remembering this when interpreting monthly price changes. The average may also change if the prices of apartments already on offer remain stable – comments an expert from the RynekPierwotny.pl portal.

New apartments are changing the market structure

A similar phenomenon was also visible in other large markets. BIG DATA data show that August brought an increased supply of apartments from the popular segment. For buyers, this means more choice, but at the same time it changes the price proportions of the entire offer.

Therefore, small monthly movements in the average price do not always show what is actually happening in the market. It is also important which premises are for sale and what their share is in the entire offer.

– However, the average itself does not show the whole picture of the market. Therefore, it is worth adding the median to the analysis of apartment prices. The median is the middle value: half of the apartments on offer are priced lower than this, and half are higher. Thanks to this, it depends less on the presence of very expensive premises than the average – says Wielgo.

The median shows how much a “typical” apartment costs

In August, in all seven analyzed metropolises, the median price per square meter was lower than the average. The biggest difference can be seen in Warsaw. With an average of 19.6 thousand the median was PLN 17.4 thousand. PLN per square meter. In Wrocław, the average reached 15.9 thousand. PLN, and the median is PLN 14.5 thousand. zloty. In Krakow it was 17.3 thousand respectively. and 16 thousand PLN, while in Poznań – PLN 14.3 thousand. and 13.5 thousand zloty. In Tricity, the average price was PLN 17.9 thousand. PLN per square meter, and the median is PLN 17.6 thousand. zloty. In Łódź the difference was even smaller – 11.6 thousand. PLN vs. 11.3 thousand zloty. In the Upper Silesian-Zagłębie Metropolis it was 11.2 thousand respectively. and 10.9 thousand zloty.

– The median shows the price of a typical apartment on offer. The average, in turn, shows well the direction of changes in the entire market. Only a comparison of both indicators allows us to see the full picture of the situation – says an expert from the RynekPierwotny.pl portal.

The difference between the average and the median is the greater the greater the share of top-priced apartments in the offer. The best example is Warsaw, where the prices of the most expensive new apartments today exceed PLN 80,000. PLN per square meter.

At the other end is Łódź. There, the mean and median are much more similar. Although luxury apartments are also available on this market, their share in the entire offer is so small that they do not influence the statistics as much as in the capital.

There are fewer and fewer cheaper apartments

For people looking for their own apartment, the availability of premises within a specific budget may be even more important than the average. In this area, the situation on some of the largest markets is becoming less favorable.

In Warsaw, Kraków, Wrocław and Tricity, premises priced up to PLN 15,000 were considered relatively cheap. PLN per square meter. In Poznań, Łódź and the Upper Silesian-Zagłębie Metropolis, the border was set at 12,000. PLN per meter. Over the last 12 months, the number of such apartments has decreased significantly in several metropolises. In Warsaw it dropped from 5.3 thousand. up to 4.5 thousand premises, i.e. by 16%. In Wrocław, the offer shrank from 6,000. up to 5.1 thousand apartments (-14%). In Poznań, the number of premises meeting the adopted price criterion decreased from 2.7 thousand. to 2.1 thousand, which means a decrease of 23%. In the Tricity, the change was much smaller – from 3.5 thousand. up to 3.4 thousand apartments, i.e. by 2%.

However, the offer of cheap apartments was not shrinking everywhere. In Krakow, the number of premises costing less than PLN 15,000. PLN per square meter increased from PLN 3.5 thousand to 3.7 thousand, i.e. by 7 percent. An even greater increase was recorded in Łódź. Number of apartments with a price of up to 12 thousand PLN per square meter increased from PLN 5.7 thousand up to 6.1 thousand premises (+7%). In the Upper Silesian-Zagłębie Metropolis, the offer increased from 6.6 thousand. up to 7.2 thousand apartments, i.e. by 10 percent

A stable average does not necessarily mean better availability

The data therefore show that stabilizing average prices does not necessarily mean an improvement in the situation of people on a limited budget. What is crucial is how many apartments are actually within the financial reach of a potential buyer.

– For the buyer, the average price itself is only part of the information. Equally important is how many apartments are within his financial reach. If the offer of cheaper premises is shrinking, waiting for a further decline in the average price does not necessarily work to his advantage. It may turn out that in a few months the choice of apartments in his budget will be smaller than today – notes Wielgo.

The RynekPierwotny.pl portal expert points out that the limited supply of cheaper apartments is visible primarily in those markets where the average price per square meter has increased the most in the last year.

In Warsaw, the average price increased by 10 percent over 12 months. In Wrocław it was 8 percent, and in Poznań 6 percent. The situation was much calmer in Tricity and Kraków, where average prices increased by 3%. In Łódź, the increase was only 1%. At the same time, the number of apartments in lower price segments increased in these cities. A different trend was recorded in the Upper Silesian-Zagłębie Metropolis, where the average price per square meter was 1 percent higher. lower than the year before.

Price is not everything. The structure of the offer also matters

August’s data therefore show that assessing the new apartment market solely on the basis of the average price may lead to overly simplistic conclusions. Fluctuations in this indicator may result not only from changes in developers’ price lists, but also from what apartments are on sale in a given month.

Therefore, when analyzing the market situation, it is worth simultaneously monitoring the average, median and number of apartments available in particular price ranges. Only such a comparison allows us to assess whether the offer of new apartments is actually becoming more accessible to buyers.