Traditionally, at the beginning of a new year, developer companies listed on the GPW release reports on the sale of apartments for the last quarter and the whole past year. This time, the contract statistics presented by stock exchange heavyweights reached a record level of progress year on year. According to experts from RynekPierwotny.pl, this is due to an exceptionally low base and a solid counteraction of last year’s contracting, which was stimulated by the government’s demand booster in the form of BK2%. The question remains, to what extent it is possible to maintain such a decidedly positive trend this year.
Optimistic Summary of Successful Year
The presented rate of fourteen leading companies in the national development industry of a residential profile, companies listed on the primary market and the Catalyst of the Warsaw Stock Exchange, in the last quarter of last year, contracted the sale of a total of 6014 premises, which is the result, no less, not only about an impressive 60 percent better over the previous year, but also one of the best in the history of corresponding quarterly periods. With one exception confirming the rule, the remaining baker’s dozen showed quite impressive progress year on year, counted not only in tens, but in five cases even in hundreds of percent.
The significant statistically increase in developer contracting is the effect of a very low base of 2022, the initial period of the cyclical economic slowdown, which was then canceled last year by the initiative of the previous government coalition, which as part of the election campaign launched another program of subsidies for housing loans in the form of Safe Credit 2%. In its effect, as pointed out by experts from the RynekPierwotny.pl, the prices of new apartments soared by over 20 percent on average in the main domestic metropolises, and the offer from developers has been significantly drained.
Mixed Feelings
The overall result of last year’s contracting, although it seems above average and definitely satisfying given the current difficult economic times, may yet arouse quite mixed feelings. The total result of 23 thousand sold premises is exactly 5 thousand units worse than the record result of 2021, which, taking into account the fact of strong stimulation of demand in the form of BK2%, raises concerns about the continuation of the good sales streak of the primary housing market in the current year.
Three companies: Develia, Victoria Dom, and Ronson have announced historically record annual sales results. On the other hand, however, out of the four market leaders, including Dom Development, Atal, Robyg, and Murapol, only the first of the mentioned companies approached the level of 4 thousand contracted premises, which two years ago was clearly exceeded by all of them.
WIG Real Estate at a Crossroads
Despite promising prospects for the development of the domestic primary housing market, confirmed by the declaration of the new authorities to continue strong stimulation of housing demand with another generous tranche of mortgage subsidies, this time under the Start House banner, the index of the stock exchange situation for developer and real estate companies has been in a fairly clear downward trend for nearly four months. What is more interesting and quite worrying, it remains in clear contrast to the decidedly “bullish” tendencies of the main GPW indices with WIG and WIG-20 at the forefront. The question arises, where does this kind of situation come from?
It seems that stock market investors are not entirely certain of the positive effects of the theoretically salvific role of the housing policy of successive governments, which consists in rather unreflective pouring billions of złotych of public money into preferential housing loans. This type of path for the development of national housing, based on continuous stimulation of demand without active support for the creation of adequate supply, is a risky one-way game, which in the foreseeable perspective can lead the primary housing market to a dead end.
Author: Jarosław Jędrzyński, expert of the RynekPierwotny.pl portal.
