Secondary Market Home Prices May Surge Significantly Due to Government Program.
Real estate experts admit that such large disparities between secondary and primary market prices have not been seen for many years, if ever. For comparison, in major cities, the price difference per square meter can reach even 4-5 thousand zlotys. For example, in Szczecin, the developer’s price is about 12.3 thousand zlotys per square meter, while on the secondary market this price reaches up to 8.5 thousand zlotys.
“Unfortunately, we should expect that prices on the secondary market will also rise because when the ‘Flat for a start’ program comes into effect, people will first head towards offers that are within their reach. Attractive secondary market apartments will disappear in the blink of an eye, causing price increases,” says Mirosław Król, a real estate market expert.
Be Ahead of Price Increases. The Secondary Market May Skyrocket When ‘Flat for a start’ Launches
For buyers, this is not good news. It is expected that the new subsidy program for mortgage loans will drive up prices on the secondary housing market. Currently, you have to pay several thousand zlotys less per square meter for a second-hand apartment than from a developer. This situation will be verified when a significant group of consumers who gain creditworthiness will enter the market and start looking for homes for themselves.
“We see that many offers from the secondary market are being withdrawn. This happens when sellers see a chance for a more expensive sale of the apartment in a few months. If the seller is not under financial pressure, they know that in the fall or early 2025, when the ‘Flat for a start’ program comes into effect, they can expect better offers,” says Mirosław Król.
How Much Can Prices on the Secondary Market Rise?
“Everything depends on the location and whether developers will indeed continue to drive up real estate prices on the primary market. I can imagine that an increase of about 15% by the end of the year is realistic. Prices for larger apartments will rise because they are currently the cheapest. I do not expect an increase in prices for studio apartments, at least not due to the government program. Here we clearly see preferences concerning families, hence the greater interest in two-room and larger apartments,” says Mirosław Król.
There Is Movement in the Real Estate Market. Some See Hope for Buying a Home, Others Lose It
As experts add, the “hunt for apartments” continues, because if someone currently has the creditworthiness, they usually try to beat the entry into effect of the ‘Flat for a start’ program, which may turn out to be another factor driving up prices in the real estate market.
“There are many customers and many questions. Some want to beat the ‘Flat for a start’ program and buy an apartment at current prices, while others ask, for example, about the possibility of reserving a unit until they obtain a loan. In both cases, we see a great determination among consumers to buy an apartment. Government programs cause movement in the market, some see hope for buying a home, while others, on the contrary, because when the price rises, the property will be out of their reach,” says Mirosław Król.
“Some clients have set up ‘alerts’ on real estate portals and as soon as an apartment comes up for sale, they are immediately interested and look for purchase options. There is a noticeable rush before price increases,” adds Mirosław Król.
The ‘Flat for a start’ program will come into effect later this year. Currently, the stage of social consultations is underway.
