In discussions about real estate, there is often an accusation that the market is in a bubble. Is this really the case? UBS Bank analyzed the situation in 25 cities and came to conclusions that will surprise Poles tired of housing prices.
UBS Bank analyzed 25 markets and compared prices to earning opportunities in the analyzed cities. On this basis, he concluded that prices may be rising, but a bubble is still far away. “According to UBS, apartment prices in the capital are fully justified. We owe this, among other things, to the fact that in recent years, salaries in Poland have gone hand in hand with housing prices. Most European countries can envy us,” summarizes Bartosz Turek, chief analyst at HREIT.
The Warsaw real estate market took last place in the UBS report. In this case, there is something to be happy about, because it means that, according to the analysts of the mentioned institution, apartment prices in Warsaw are not overstated. The report shows that we are neither dealing with a bubble on the housing market nor with undervaluation of apartments. So the prices are neither too high nor too low. However, I don’t think anyone needs to be convinced about the latter.
Housing prices are rising, but not that fast
However, someone might ask – how come we don’t have a problem, since the average offer price of apartments in the capital is, according to various sources, around PLN 16,000 per square meter. The answer is simple – an average apartment in Warsaw does not cost PLN 16,000. This is only the average offer price, i.e. the average price taken from advertisements in which owners enter the prices they dream of.
This does not mean that on the other side there is a buyer who is ready to pay the seller’s desired price. Usually, there is at least some negotiation. And if that was not enough, buyers usually choose cheaper apartments, while the offer usually includes expensive and higher standard properties. This means that offer prices are generally much higher than transaction prices.
It is worth recalling here that the last reliable information on how much Poles actually paid for apartments comes from the second quarter of this year. These data – collected by the National Bank of Poland – suggested that we paid PLN 12,000 for a meter of used premises in Warsaw, and PLN 13,000 for a meter of premises from a developer. zlotys. And although you can see with the naked eye that real estate prices have increased in recent months, it is not possible for there to be an increase of 25% during this time.
Overtaking the offer artificially increases the offer prices
We will have to wait a few more weeks for reliable NBP data on changes in housing prices. In the meantime, let us be cautious about loud headlines suggesting sharp increases in housing prices. Let’s remember that even if the average apartment in the advertisements was valued by the owner at PLN 16,000 per square meter, it does not mean that it will be easy to find a buyer who will actually pay this price for the apartment.