Poland: Will housing prices continue to rise and at what rate?

Will housing prices continue to rise next year? At what rate? What do developers think will have a decisive impact on the cost of projects?

Angelika Kliś, board member of Atal S.A..
Inflation and the high cost of financing have significantly reduced the number of new investments and construction starts on the market. For this reason, a shortage of flats is visible, especially in larger centres. This supply gap will be felt for longer as it takes time to bring new projects to market, on average around 2 years. The cost of production will also be affected by high land prices, which are also in short supply, especially in attractive locations. In such conditions, further increases of flat prices are very likely, in real terms by several per cent per year, which is in line with the current inflation rate.

Mariola Żak, Sales and Marketing Director at Aurec Home.
The price madness on the primary market continues at its best. We are currently observing a record increase in the average price per square metre since the financial crisis in 2008. In Warsaw, new price thresholds have been exceeded, and one has to pay on average 16 thousand per square metre of a flat. In the course of 12 months, developer flats in the capital have become more expensive on average by 18 per cent. The main reason for this is the demand fuelled by the 2 per cent Safe Credit, which sucks premises from the developers' offer. In no time at all, the cheapest flats are disappearing and those that remain are getting more expensive. It is worth knowing that the process of real estate development is complex and the prices of flats depend on many factors. Above all, it depends on the purchase of land, and currently the shortage of plots with building permits or covered by local zoning plans is pushing up their prices. Administrative procedures that drag on for months and the issuance of a building permit also greatly extend the period necessary to launch the investment for sale. During this time, the developer incurs expenses related to financing the project, and with the current high interest rates, this is strongly felt. Although the prices of building materials have slowed down, production costs are still very high, both for raw materials, energy and labour. Housing is expensive and will become even more expensive. According to estimates, there will be an increase of 10-15 per cent in the average transaction prices of flats within a year.

Cezary Grabowski, Sales and Marketing Director of Bouygues Immoblier Polska.
The prices of flats will increase and this is not only the subjective opinion of developers, but first and foremost the result of market analyses by experts. A report on the Warsaw primary residential market from the third quarter shows that the cost of flats will increase. The size of this increase will be influenced primarily by supply. If there are no problems with the introduction of new projects to the offer, at the end of the year, the average price per sq.m. of a flat in Warsaw will amount to ca. PLN 17.6 thousand and this will be an increase of ca. 23.5 per cent year-on-year. In the following years, this increase will slow down a bit, due to a larger residential offer and competition. It is estimated that next year the year-on-year price increase will be around 10 per cent.

Andrzej Gutowski, Vice-President, Sales Director Ronson Development.
The answer to this question is not clear-cut, as there are still too many unknowns. If, for example, the 2 per cent Secure Credit programme were to be extinguished at the beginning of 2024, we can certainly expect a cooling of the housing market and speak of a certain stabilisation, although prices will not stop rising. There are still too few projects being launched on the market. On the other hand, we could be talking about price increases of a linear nature, rather than leapfrogging as before. I estimate that, depending on whether there is a continuation of the BK 2 per cent programme and whether the number of projects launched increases, prices will increase in the range of 5 to 10 per cent per year.

Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction.
Unfortunately, all indications are that housing prices will continue to rise. This is influenced by many factors, but among the most important is the general increase in the cost of development. To begin with, we are struggling with the shortage of land for investments, which are becoming more and more expensive because of this. The very process of preparing and realising investments extends considerably in time due to complicated procedures and the finalisation of further formalities. And these, as we all know, are further costs. Yes, the prices of construction materials are stabilising, but employee costs, energy costs and financial costs, for example, are rising.

Tomasz Kaleta, Sales Department Director, Develia S.A.
The opinions of developers and analysts converge on this topic - housing prices will grow, although a little slower than this year. The main factor is the difficult situation on the supply side. In Poland's six largest cities, developers currently have a record low offer of less than 35,000 flats. Such a low level of availability was experienced in 2010. The situation is particularly visible in Warsaw and Krakow, where the number of units available for sale is 50 per cent lower than in previous years. Such a state of affairs may not come as a surprise, however, as developers were able to introduce 35 per cent fewer flats than were sold.

In addition, the number of building permits issued for new residential developments is decreasing. With demand outweighing supply by such a large margin, price increases are inevitable, especially as land for development is consistently rising in price, in some locations by up to several dozen per cent per year.

Zuzanna Należyta, commercial director at Eco Classic.
Housing prices will continue to rise because there is no other option. The availability of land is limited, the investment process takes several years, official procedures are lengthening, the prices of materials and labour are increasing and all of this is limiting supply. With the current increased demand, price increases are inevitable.
Dawid Wrona, board member at Archicom
Certainly, the market is facing a shortage of flats and, given the needs of buyers, we can expect the supply gap to deepen. Looking at the coming months, we have to expect a further increase in flat prices, especially in well-connected projects designed on the basis of current trends and customer requirements. We will certainly be dealing with a two-speed market. Locations in the centre, in popular districts, where there is a shortage of flats and the demand is huge, the growth dynamics will be much higher than in other locations. However, it is difficult to estimate how big when looking at the market as a whole. The increases are determined by a number of variable factors, such as the future of the government programme First Flat and the availability of flats for its beneficiaries or the potential entry into force of new programmes. From the developers' perspective, the costs of realising investments have stabilised, which encourages the search for new optimisation solutions in other areas.

Janusz Miller, sales and marketing director of Home Invest.
We predict that housing prices will continue to grow, but the rate of growth will be lower than the one seen in the last months of this year. This will depend on a number of factors, such as demand and supply on the property market, the economic situation of the country, or the continuation of government support programmes.
Many factors are currently driving up the cost of construction projects. Although the prices of building materials may be stabilising, other factors such as labour costs, regulations, taxes, inflation or changes in energy costs may continue to drive up housing prices. To what extent these costs increase will depend on the specific market situation and local conditions.

Marek Starzyński, Director of the Sales Department at Okam.
We are implementing projects in very attractive locations, where the prices of flats are directly affected by the high cost of land purchase and the General Contracting costs, which have remained at a similar level for several months. We expect a further increase in flat prices in large agglomerations, but the rate of growth will be slightly lower than in recent years.

Joanna Chojecka, sales and marketing director for Warsaw and Wrocław at Robyg Group.
The process of project development is significantly slowed down by limited access to land and a small number of building permits issued, which also affects prices. Therefore, we expect housing prices to rise further. The waiting time for obtaining a building permit is getting longer, currently it takes about 1.5 - 2 years, while it used to be 6-9 months.

Anna Bieńko, Sales Director at Wawel Service.
The increase in housing prices will vary in different regions of Poland. Cities with high demand, such as Warsaw or Krakow, may continue to experience price increases, especially in attractive locations. In less popular regions, price increases may be more moderate. While the prices of construction materials have stabilised, they still remain at a relatively high level compared to previous years. On top of this, there are other factors such as high inflation or the current global situation. In addition to this, housing prices are, of course, influenced by the cost of labour, general contracting and electricity costs, which translate into the cost of the construction itself.

Source: dompress.pl
Photo: Enklawa Ursynow, Home Invest