Poland: What challenges will the housing market face in 2024
What changes will we see in the sector this year? What trends will shape the housing market in 2024?
Zbigniew Juroszek, President of Atal:
The prosperity of the real estate market is influenced by many economic parameters, as well as the formal and legal environment, including government actions. The year 2023 showed this very clearly and this must also be taken into account when forecasting trends for 2024. I expect to maintain similar sales as in the current year. Contracting increases are possible for the best prepared companies, which are constantly launching new projects.
The price dynamics are heavily influenced by extensive administrative procedures, which lengthen the investment process, and insufficient supply related to, among other things, shrinking land resources in large cities. Therefore, it will be a challenge for the industry to acquire land for investments. Atal is in a better position, as it has large financial capabilities that allow it to purchase large plots of land for multi-phase projects. In the above context, mention should also be made of the Lex developer spec. In theory, it is a tool for converting service areas into residential areas, but practice shows that it is a very arduous, long-term and risky process.
I am of the opinion that large companies will launch more investments and projects. Smaller companies will still have problems with access to land and attractive financing for their operations. In my 2024 scenario, I assume an interest rate cut, but this may not happen until Q3/Q4. This would give a further boost to the demand side. In this context, we are also waiting for concrete proposals from the new government. Higher contracting will be possible through government support for buyers.
Housing is currently a scarce commodity. This is, among other things, the result of a slowdown in new construction on the market due to high financing costs. The perceptible supply gap, together with the rapid pace of liquidation of the current offer and emerging wage pressure, create an environment in which we can assume a few per cent increase in housing prices in 2024. I predict that the main demand force in the real estate market in 2024 will continue to be people meeting their own housing needs and individuals who invest in units for rent or simply to protect their capital.
Anna Bieńko, Sales Director at Wawel Service:
We anticipate that the market will have to face several significant challenges and adapt to new trends and regulations. We certainly have to mention the already observed phenomenon of rising property prices, which is likely to continue into 2024. This poses a challenge for future buyers, especially young people planning to buy their first home. Developers will try to meet the challenge of providing more affordable housing.
In addition, the new regulations governing the property market will introduce changes to industry practices and processes. Developers will have to adapt to the new legal requirements, which in turn may affect the pace of development and the standards of properties on offer. Going forward, the increasing difficulty in acquiring suitable land for new residential developments may limit the availability of new offers on the market, which in turn will lead to increased competition for land acquisition, which will affect property prices.
The growing environmental awareness of society is already driving the market towards sustainable and eco-friendly solutions in construction. Wawel Service is a leader in this area and it is expected that other developers will also be more willing to invest in energy-efficient buildings and green solutions to meet customer expectations.
A trend that will intensify is the growing interest in smart home technology. Customers increasingly expect new flats to be equipped with solutions to remotely manage various aspects of home life, such as lighting, heating or security.
The forecasts for the overall health of the national economy are also worth highlighting. If forecasts of favourable investment conditions persist, further growth of the property development sector can be expected.
Andrzej Oślizło, CEO of Develia S.A.:
After an intensive 2023 for the real estate sector, in which demand significantly exceeded supply, we expect stabilisation in 2024. Since September, we have seen a gradual rebuilding of supply, thanks to the increased activity of developers who, in response to the increased demand related to, among other things, the 2% Safe Credit programme, have started to introduce a greater number of new investments. Despite this, the offer in Poland's largest cities, Warsaw, Krakow, the Tri-City and Wrocław, is still at a low level, with the first two among the lowest ever. We expect that the level of available flats should not decrease any more, while it will take several quarters to reach a relative balance between demand and supply in the primary market. We do not see a stockpile of building permits and, in addition, the number of building permits in 2023 has fallen by around 25 per cent compared to 2022. It may turn out that after the increase in new project launches expected in the coming months, already in the second half of 2024 some developers will have limited opportunities to increase the supply of further investments. The winners will be those companies that have a secured land bank with projects that can be launched quickly, reacting flexibly to the market situation.
We assume that in the first quarter of 2024, developers will continue to finalise deals backed by the 2% Secure Credit programme, which will positively translate into sales performance. We anticipate that people who have been holding off on buying a flat due to the very limited choice of units available on the market will return to the sales offices in the near future. Cash customers who are looking for investment alternatives due to the fall in interest rates and the attractiveness of deposits will also remain active.
This year, due to possible increases in development costs in the context of an improving economic situation, including price expectations for the purchase of attractive land, we do not see room for a decline in housing prices. However, we expect their growth to be slower than in the last several months.
Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction:
At this point, 2024 is quite an unknown for our industry. We are at a time when a new government has taken over, and no one knows whether the election promises and ideas will translate into concrete solutions for the housing market. It will largely depend on the actions and changes introduced by the government as to how the supply and demand in the real estate market will be shaped.
I think we will continue to face a housing gap, a shortage of land and we will certainly not be spared by increases in property prices. We welcome, on the other hand, the changes in awareness and regulations that translate into an increasing responsibility of the construction industry towards the environment. The construction sector will certainly be alive with the topic of sustainable construction and energy transition in the coming months.
Eyal Keltsh, CEO of Robyg Group and Vantage:
The key issues for 2024 are similar to those raised in the previous year, i.e. stabilising the macroeconomic environment, reducing inflation and gradually lowering interest rates. This should have a positive impact on the residential property sector. The second element is the speeding up of administrative procedures, related to the issuing of building permits. They still take too long, which hinders the launch of new developments and reduces the supply of housing on the market.
Both state and local administrations should make procedures as easy as possible so that construction can be carried out as efficiently as possible. This is an area that should certainly be improved. Of course, the government should also make it as easy as possible for citizens to purchase their first home. This is an essential element for a sense of security, to promote population growth and economic growth. Therefore, all programmes, including easily accessible and low-interest loans, should be a permanent part of supporting its citizens and government programmes.
Demand for housing is at an all time high, also among foreigners who are increasingly choosing Poland as their living destination. Certainly, the Safe Credit programme will allow for better availability of housing for young people, who often cannot afford financing on market terms.
Source: dompress.pl
Photo: OKAM - Inspire Katowice
