The best investment under the sun? Apartment prices may start to fall

Safe loan 2 percent  this is a lesson for the new government.  Is it possible to undo the price increase?

Buying apartments for investment purposes seems to be a new sport for Poles. They are convinced that this is the best investment of money both in the short and long term. However, it is enough to remember what happened to prices a dozen or so years ago to know that the market can collapse – like any other.

People who have more cash believe that real estate is the best investment and a guarantee of profit in the long run. analysts wonder whether this is really the case.

In 2008, real estate prices began to fall

You only have to go back a dozen or so years to see that prices can drop rapidly. At the beginning of 2008, the average rate per square meter in Warsaw was PLN 8,500, but when the financial crisis came – accompanied by banks tightening their lending policy and tightening the rules for granting loans in foreign currencies (the end of Swiss franc loans), there was an oversupply on the real estate market, and apartment prices started to fall.

In 2012, they reached their minimum – PLN 6,466 per square meter in the capital. In Kraków, the lowest possible rate occurred only two years later. After that time, it was only more expensive again (though not more expensive than at the beginning of 2008) – until 2020, when the world was gripped by the coronavirus pandemic. This time the reductions did not last long and we are now seeing record increases again. The question is how long.

The situation shows that a constant increase in prices is not obvious, and business cycles with a phase of depression also occur in Poland. To ensure that the crisis does not affect us, it is worth carefully considering the purchase of an apartment and choosing a property that will maintain its price over time.

So what else should you pay attention to?

Convenient location

If we don't want to make the wrong choice, let's check what investments are planned in a given place and in what direction it will evolve in the coming years. If today it is a neglected, ruined part of the city and there are no revitalization plans, it can be assumed that housing there will become cheaper more quickly when the business cycle changes.

On the other hand, a property that is already conveniently located will be so in a few or a dozen years. But we have to pay dearly for it now.

Extensive urban infrastructure

An important issue is the immediate vicinity of our property. The more extensive it is, the greater the value of the apartment. Even after many years, the proximity of retail and service outlets, educational institutions, places of entertainment and relaxation, as well as sports centers will be valuable. However, the most important thing is communication.

The prestige of the location

The only relative “certainties” when it comes to maintaining value in the long term are luxury properties in excellent locations. We are talking about high-standard apartments, located in prestigious, recognizable buildings, such as skyscrapers in business districts or tenement houses in old towns. There will probably be demand for such properties. They are also the most resistant to changes in business cycles.

Favorable apartment layout

Tight, dark rooms or connecting rooms are the nightmare of old buildings. Old apartment layouts have no use in today's world. So let's make sure that our property is universal in this respect, but also as functional as possible. The apartment should not be too large (unless it is a high-end apartment) – a maximum of 60 sq m.

Additional areas

An apartment in a block of flats always means too little storage space, but that's not all. For this reason, additional spaces will always be welcomed by buyers. More and more people interested in buying real estate consider a balcony terrace as a necessary condition for their dream home. Such space is therefore necessary in an apartment that has to maintain its price.

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