More and more apartments are coming to the market. Will this force prices to drop?

In Warsaw, June brought a long-awaited drop in the average price per square meter of apartments on the secondary market. Symptoms of price stabilization are also visible in other metropolises – according to data from the GetHome.pl portal.

– After the expiry of the “Safe Credit 2%” borrower support program, sales of used apartments have dropped significantly. However, it would probably be an exaggeration to say that we have a sales slump on the market – says Marek Wielgo, expert at GetHome.pl.

Have sellers started to “tone down”?

This impression may result from the fact that since the expiry of the “Safe Credit 2%” program, the offer of apartments on the secondary market has been increasing. This is evidenced by data from Unirepo.pl, which monitors the 52 largest advertising portals. At the end of May, there were about 145.5 thousand unique offers of apartments posted on them throughout the country. Since December last year, their number has increased by over 18 percent. However, this does not mean that buyers’ interest is rapidly decreasing with each month. There were simply more apartments that sellers introduced to the market than people willing to buy them.

It seems that after the sales “slump” in January this year, in the following months the number of people interested in second-hand apartments stopped decreasing and stabilized. This may be indicated by Unirepo.pl data, which shows that in May this year, around 35 thousand unique apartments were withdrawn from the secondary market. For comparison, a year ago, in the same period, 29.5 thousand unique premises were withdrawn, while in the best sales quarter of last year – an average of 36.3 thousand per month. In turn, in the fourth quarter of last year, the monthly average dropped to 35 thousand, i.e. to the level that Unirepo.pl noted in May this year. The problem is that we are still talking about withdrawals. Most likely, in the vast majority of cases, this was a consequence of sales. However, some of these premises, it is not known how many, could have been withdrawn by the sellers due to the lack of interested parties. Secondly, there is nationwide data. The situation in individual cities is very diverse.

Apartment prices in the largest cities

One thing is certain, last year supply did not keep up with demand, and this year we are dealing with the opposite situation. So have sellers started to slow down? According to GetHome.pl data, yes, although not immediately. It was only in the second quarter that the first symptoms of price stabilization appeared. In May, in Krakow, Poznan, Tricity and in the cities of the Upper Silesian-Zagłębie Metropolis, the average price per square meter of apartments on the secondary market maintained the April level. The average continued to march upwards in Lodz, Warsaw and Wroclaw.

In June, however, the increases slowed down in Łódź (PLN 8.7 thousand/sq m), in Kraków (PLN 17.6 thousand/sq m), where the average price per square meter did not change for the second month in a row, while in Warsaw (PLN 18.6 thousand/sq m) and the Tri-City (PLN 15.3 thousand/sq m) it dropped by 1%.

Lower prices in Warsaw: this doesn’t mean anything yet

A few days ago, we described the results of the price analysis conducted by the service TabelaOfert.pl. On 15 monitored housing markets, the prices of new apartments changed slightly on a monthly basis. The largest increases occurred in Rzeszów (+1.4%), Kraków (+1.4%), Łódź (1.3%) and Lublin (+1.0%), Toruń (+0.6%), Katowice (+0.5%), Kielce (+0.4%) and in the Poznań agglomeration (+0.8%). Declines were recorded in Warsaw (-0.7%) and in the Warsaw agglomeration (-1.4%).

The price drops in Warsaw and the Warsaw agglomeration result from the structure of new supply; cheaper projects in less prestigious locations were introduced to the market. The opposite situation was observed in Kraków, Łódź, Lublin, Toruń and the Poznań agglomeration, where the price increase results from the introduction of more expensive projects in more prestigious locations. Only in Rzeszów and Kielce did the price increase result partly from the increased sales of cheaper premises and from the actual increase in list prices.

A detailed analysis of price changes shows that, apart from Rzeszów and Kielce, where prices are indeed rising, developers generally did not make any significant changes to their price lists. The slight price increases and decreases were primarily the result of the changing structure of the offer, i.e. the sale of a larger number of cheaper or more expensive premises and the introduction of projects with different prices to the market.