After a crazy half-year on the real estate market, when prices in some cities increased by several percent, the first symptoms of a slowdown in the price rally are visible. Unfortunately, there is a risk that at the beginning of 2024, developers operating in the largest metropolises will limit their investment activity due to the decline in demand for the apartments they build. This may result in the suspension of the “Safe Credit 2%” program.
Since July, i.e. since the “Safe 2% Credit” appeared in the banks’ offer, there has been a significant price acceleration in almost all metropolises. Łódź was an oasis of stability among the largest metropolises. And this is both in terms of the size of the offer and the average price of new apartments, which increased the least this year, “only” by 8%. In other metropolises, we saw double-digit increases in the average price per square meter.
Last year saw a gallop in real estate prices
– Back in October, Kraków was the leader in increases in the average price per square meter of apartments available from developer companies– reminds Marek Wielgo, expert of the RynekPierwotny.pl portal.
After a crazy third quarter, in which the average price per square meter increased by as much as 11 percent, the end of last year brought the first symptoms of price stabilization in this city. Preliminary data from BIG DATA RynekPierwotny.pl show that in December their average per square meter remained at the level from November, and in the entire fourth quarter it increased by 2%. However, in the Tricity, price increases started in the second half of last year, and the fourth quarter was record-breaking in this respect. The average price per square meter increased by as much as 10%.
The most, as much as 27%. it increased in 2023 in Tricity. In Kraków, the increase was 24 percent, and in Warsaw the average price per square meter of apartments offered by developers increased by 23 percent.
Apartments worth millions in Krakow and Warsaw
Of course, the most expensive place is in Warsaw. Preliminary data from BIG DATA RynekPierwotny.pl show that at the end of December 2023, the average price per square meter of apartments offered by Warsaw development companies exceeded PLN 16.7 thousand. zloty. So, for a 50-square-meter new apartment in the capital of Poland, you had to pay on average almost PLN 837,000. PLN, i.e. by approx. 155 thousand more than a year ago, when the average price for a flat of a similar size was almost PLN 682,000. zloty. With this amount of money at our disposal, we could buy not a 50-meter, but a 41-meter apartment, i.e. 9 square meters smaller.
In turn, in Krakow, purchasing an apartment with an area of 50 square meters currently means an average cost of approximately PLN 151,000. PLN higher than at the end of last year, and in the Tricity – by as much as approx. 160 thousand. zloty. Searchers who are unable to add this amount to purchase a 50-square-meter apartment must be satisfied with a smaller area by as much as 10 and 11 square meters, respectively.
“Safe Credit 2%” practically “cleared” developers’ offer of the cheapest apartments. The phenomenon of selling the cheapest apartments and increasing their prices is best illustrated by the structure of apartment prices offered by developer companies. For example, in the Tricity, where the average price per square meter increased the most, the offer of premises priced below PLN 9,000 PLN shrank last year from 24%. up to 7 percent However, the percentage of apartments priced above PLN 15,000. PLN per meter increased from 17%. up to 42 percent
When will housing prices stop rising?
Experts from the RynekPierwotny.pl portal point out that in order for the average price of a square meter of apartments on the primary market to stop rising, developers would have to radically increase the supply of apartments in the popular segment, i.e. those built with credit customers in mind. We had such a situation in Łódź, where in December the percentage of apartments priced below PLN 9,000. PLN per square meter increased from 34%. up to 36 percent Unfortunately, there is a risk that at the beginning of 2024, developers operating in the largest metropolises will limit their investment activity due to the decline in demand for the apartments they build. This may result in the suspension of the “Safe Credit 2%” program due to the exhaustion of funds for subsidies in this year’s state budget. Moreover, apartment prices have reached a level that fewer and fewer buyers, especially those using a loan, are able to accept.
On the other hand Today, it is difficult to imagine a decline in the prices of attractive plots and construction costs. Especially since changes in the technical conditions regarding buildings and their location will come into force from April. For apartment buyers, the new regulations are beneficial in terms of living comfort. However, it should also be noted that construction costs will increase and at the same time the area of real estate for sale will shrink. This may result in an increase in the prices of new premises.
At the beginning of this year, we can expect an influx of building permits and construction applications, as such projects will be able to be implemented based on the current technical requirements. This resembles the situation from three years ago, when much more stringent energy standards for residential buildings were introduced.