Poland: What prices are residential buyers choosing now?
How have the preferences of home buyers changed after the drastic limitation in access to loans? To what extent have buyers verified their expectations? Which apartments are the most popular? At what prices? Are investment buyers still active?
Tomasz Kaleta, director of the Sales Department of Develia S.A.:
As far as the sales structure is concerned, we did not notice any major changes compared to the previous years. We sell more or less the same number of small premises, studios and two-room premises as larger apartments. The average area of real estate for sale fluctuates around 54 sqm. Prices depend on the standard and location of the investment.
However, it cannot be denied that the current geopolitical and economic situation has not had a strong impact on the market, making it particularly difficult for certain customer groups to buy. Interest rate hikes have hit young buyers who are planning to buy their first home the hardest, who usually have to use bank financing. Another group are people who, with the help of a mortgage, wanted to buy a house or convert an apartment into a bigger one. Currently, only about 25 percent. flats in our offer are purchased with the support of banks and usually it is not a significant subsidy. The LTV ratio, which determines the relation of the loan amount to the value of the real estate, amounts to an average of 40-50 percent in these transactions. Currently, cash customers are predominant, looking for large flats for their own needs or buying small flats for investment purposes.
Cezary Grabowski, marketing and sales director at Bouygues Immobilier Polska:
Due to the significant decline in purchasing opportunities, caused by decreasing creditworthiness, customers are increasingly looking at the maximum use of space in apartments. This means that they are looking for well-arranged, but possible small apartments, usually two and three-room apartments. We operate on four markets - in Warsaw, Poznań, Wrocław and the Tri-City. We currently have 8 investments for sale, from small investments to comfortable housing estates for families. The price of an apartment depends on many aspects, including the location and standard of the project. People interested in buying an apartment in Warsaw most often ask for two-room apartments for up to PLN 550,000 and three-room apartments up to PLN 750,000. We also see that there are active cash customers who want to safely invest their capital when buying apartments in top locations. Of course, this is not a phenomenon on the scale of the previous years, but it is still an important part of the market, which we also have to take into account when making our investments.
Sebastian Barandziak, President of the Management Board of Dekpol Deweloper:
The reduction in creditworthiness translated into changes in the preferences of buyers. Currently, customers place much more emphasis on the price of the premises, even at the cost of giving up some of their expectations. The observations of sales advisors show that people looking for flats in the Tri-City are interested in buying flats at prices not exceeding PLN 300,000, which, taking into account current market prices, is often not possible to meet. Importantly, investment buyers are still very active, who now see the possibility of dictating their own terms of purchase to developers due to the reduced purchasing power of some customers.
Małgorzata Ostrowska, director of the Marketing and Sales Division at J.W. Construction Holding S.A.:
Buyers' preferences have not changed, their abilities have changed. Even those earning above the national average do not find it easy to plan to buy a flat. A variable rate mortgage is still cheaper in some banks than a similar product based on a periodically fixed interest rate, but the margins are higher than in the previous month. As a result, many customers lost their creditworthiness. Income at the level of 6-7000 zloty. per person, especially in Warsaw, means a fairly limited choice of apartments, and all those earning less are only renting. Hence, the rental market has been dynamically developing in recent months. The apartment can be rented not only on the secondary market. Flats and apartments rented by developers are very popular because they guarantee a high standard of premises and safety of the lease. Almost all apartments, which were abandoned for many months during the pandemic, have been rented in the Aleje Jerozolimskie 216 investment in Warsaw. Ready and equipped investment apartments are a tasty morsel for clients who want to protect their savings against inflation. By buying a property with a tenant, they can earn money from renting immediately. Investment clients usually choose small premises, preferably with one or two rooms, most often for up to PLN 500,000. Apartments belonging to the so-called category of aparthotels - Apartments Pileckiego 59 in Warsaw's Ursynów, secured by a notarial deed and an entry in the land and mortgage register. When buying such a property, you can deduct 23 percent VAT rate. Small premises with an area of less than 25 sqm, due to the inability to register in them, do not generate the risk associated with the effects of the act on the protection of tenants' rights. Customers can count on regular monthly income from long-term or short-term rental and such premises are also perfect for offices.
Karolina Bronszewska, Member of the Management Board, Marketing and Innovation Director of Ronson Development:
Our sales statistics show that the most popular areas are currently studios and two-room apartments, ranging from 30 sqm. up to 45 sqm This is a natural effect of a significant reduction in customers' creditworthiness, which is a consequence of successive increases in interest rates. It happens that our potential clients, during a visit to the sales office, give the maximum amount for a two-room flat PLN 400,000, for example in Warsaw, which at the current average prices per square meter. in the capital is difficult to achieve. However, we make every effort to make it easier for customers to decide to buy a flat in our investments. We offer a fixed price guarantee, and in all projects we have introduced a new payment system - 20/80, which assumes that 20 percent. prices are regulated by the customer at the stage of signing the contract, and 80 percent only when collecting the keys.
Cash customers are very active. Currently, up to 70 percent of projects are implemented in this way. transaction Real estate is still perceived as a safe capital investment, especially with as much interest in the rental market as it is today.
Mariola Żak, sales and marketing director at Aurec Home:
The attention of potential buyers interested in buying a flat is now focused on prices. The market radically verified their purchasing possibilities. According to the data from the Credit Information Bureau, banks granted 9,000 housing loans in July, and a year ago there were 24,000. The number of loan applications also shrank significantly. In July, there were over 14.1 thousand of them, i.e. nearly 68 percent. less than in the same period last year.
The unstable economic situation makes clients prudently approach the purchase of a flat and look for premises with a smaller area. Buyers in the Miasteczko Jutrzenki estate most often ask about studios and spacious two-room apartments with an area of about 40 sq m. We constantly observe changes in the real estate market and know what potential clients are struggling with. That is why we have launched a secure payment system 20/80, which means that the buyer pays 20 percent at the beginning. real estate prices, and the remaining 80 percent. after completion of construction.
Małgorzata Przepiera, sales manager of PCG S.A. in Szczecin:
We are observing the interest in flats with lower prices than before. Customers have reduced creditworthiness, so they try to find the cheapest apartment with the largest possible area. We still have inquiries about various sizes, both the smallest with an area of about 40 sqm, and the larger ones with an area of about 60-70 sqm. It all depends on the intentions of the buyer and the method of financing. Cash customers, of whom we have the most, are looking for larger apartments with the most attractive location, while people using a mortgage loan are looking for compromises in terms of price.
The tolerance for increasing the budget for the purchase of a flat has certainly changed. While previously the advantages of a given apartment prompted buyers to choose a slightly more expensive premises than the original budget, now the maximum amounts quoted at the beginning of the talks are rarely exceeded.
Currently, the biggest problem is the decline in creditworthiness and the uncertainty in obtaining financing for the purchase of real estate. In addition, the lack of macroeconomic stability does not make it easier for customers to make purchasing decisions. They are asking more and more often about operating costs, especially for heating.
Marek Pawlukiewicz, spokesman for Aria Development:
Due to higher interest rates and the deterioration of creditworthiness, we observe a decrease in the number of people buying apartments on credit, but this problem undoubtedly affects the entire development market in Poland. Currently, larger units sell worse, but there are more cash customers who buy smaller flats.
Prices in Osiedle Natura 2 in Wieliszew start from PLN 6,200 / sqm. A four-room flat with an area of 76 sqm, which can be picked up later this year, costs PLN 493 thousand. PLN with a parking space in the underground garage.
Source: The survey was developed by the real estate website dompress.pl
Photo: Warszawa, Ursynów, Ursynów Północny, ul. Pileckiego 59