In July, housing prices fell for the first time since 2022. It’s really happening, albeit slowly

Key conclusions

• Prices of new apartments in the largest cities (i.e. where it is expensive and prices increased dynamically in 2023) fell for the first time since 2022.

• Prices in smaller and cheaper markets have increased slightly.

• Price changes are 90 percent the result of introducing cheaper (drops) and more expensive (increases) projects.

• Real prices are lower thanks to the general discount policy. The average discount level is 5%.

• There is also a regular (not promotional) price reduction visible on the market.

• Average prices could be even lower – the prices of small apartments (especially studios) are on average 27% higher than the average for the entire offer, which results from the need to build parking spaces.

• Sales of new apartments increased significantly (+10.1%).

• The recovery in the holiday home segment continues. In July, sales increased by 23.4%, and prices – for the first time in two years – increased by 1.0%.

Of the 15 cities monitored by the Tabelaofert.pl portal, the prices of new apartments fell in seven of them for the first time since 2022.

Where property prices have fallen slightly

Decreases in the average price per m2 were recorded in Warsaw (-0.4%), Kraków (-1.7%), Wrocław (-1.2%), Gdańsk (-1.9%), Poznań (-2.3%), Katowice (-0.6%) and Szczecin (-0.4%). In all the cities indicated, apart from Szczecin, the decreases resulted from the introduction of projects in cheaper locations to the market, while in Szczecin developers simply lowered the offer prices.

The largest increase in the average price was recorded in Kielce (+4.6%), where a luxury project was launched for sale, and in Rzeszów (+2.3%), where the increase in the average price per square meter resulted from the fact that cheaper apartments were sold. A similar situation occurred in other cities; in Białystok (+1.7%), Radom (+1.1%), in Lublin (+0.6%) the price was raised by a new offer, and in Bydgoszcz (+0.7%) – similarly to Rzeszów – the increase in the average price per square meter resulted from the fact that cheaper apartments were sold.

Meanwhile, in Łódź – the cheapest large city – offer prices were raised, which resulted in an increase in the average price per square meter (+1.2%). Similarly, offer prices of apartments increased in Toruń (+1.4%).

Prices in the cities that are part of the largest cities, however, were stable. Prices rose in the Wrocław (+1.4%) and Silesia (+0.5%) agglomerations, fell slightly in the Tri-City (-0.3%) and Poznań (-0.3%) agglomerations, and remained almost unchanged in Warsaw (+0.1%) and Kraków (-0.03%).

The general conclusion is therefore as follows: where it was more expensive, the price per m2 fell. Where it was generally cheaper, the price per m2 increased slightly or remained stable.

The paradox is that the current price decline is the result of from beyond the grave BK2% program. In the second half of 2023, when the unsustainable demand was raging on the market, many developers decided to launch new projects. They hit the market, but after the end of BK2%, causing a sudden increase in supply, which effectively stopped the price increase.

The recovery is still visible in the holiday home market, where prices rose by 1.0%, but sales – for the second time in a row – increased by 23.4%.

Developer Discounts and Promotions

The research and analysis department of the portal Tabelaofert.pl also examined the discount policies of over 150 development companies. Over half of them (52 ​​percent) use discounts and promotions, and the most popular is a discount on the purchase price of the apartment.

Among companies that offer promotions or discounts, as many as 70% of promotional campaigns are simply a price discount, the average level of which is 5% of the apartment price. Among the 30% of other promotional campaigns, the most popular promotion is reducing the price of a garage to PLN 0, which means that the buyer receives the garage for free. It is worth mentioning that the price of a garage is at least PLN 35,000 (and often more), so such a promotion is very attractive to customers.

It seems that promotions work. Most sales are made in those investments where developers offer promotional campaigns.

After several months of declines, sales of new apartments are up thanks to widespread discounts.

Where is the most expensive and where is the cheapest?

Currently, the nominally most expensive city is Warsaw, where the average price per m² is PLN 16,813/m2, followed by Kraków 15,570/m2 and Gdańsk 14,668/m2, while the cheapest are Radom – PLN 8,628/m², Białystok – PLN 8,983/m² and Bydgoszcz – PLN 9,881/m².