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Apartment Sales Hit Record High in 2023

REAL ESTATEApartment Sales Hit Record High in 2023

We are finishing 2023 with 54.3 thousand developer apartments sold in the seven most important markets. Sales were thereby 45% higher than the previous year. Despite increased interest, developers did not significantly increase their supply, which at 43.7 thousand apartments introduced for sale did not even match that of last year (-4% y/y). The end of the year was marked by the phase-out of the ‘2% Safe Mortgage’ program, and according to Otodom Analytics data, December brought both a drop in the number of transactions and introductions.

Was December a litmus test for the impact of the 2% Safe Mortgage on the housing market, or was it simply the effect of holidays and leave? It is hard to say. The fact is that monthly developer sales in the largest markets in the country fell for the second time in a row – this time to the level of 4.4 thousand properties. Introductions were also significantly lower. Although they exceeded the monthly average for the whole year, after November’s highest number of new offers in the whole year, the 3.8 thousand apartments introduced in December meant a drop of over 41% m/m.

In the entire year, in the seven cities with the largest scale of the housing market (Warsaw, Krakow, Wroclaw, Gdansk, Poznan, Lodz, Katowice), 43.7 thousand developer apartments were offered for sale, 4% less than in 2022. At the same time, 10.6 thousand more properties were sold, which reduced the offer to the level of 39 thousand in total in the markets analyzed by Otodom, meaning that at the end of December 2023 it was 19% lower than a year ago.

After the launch of the 2% Safe Mortgage, the housing market entered a frenzy. Buyers who had practically abandoned the idea of buying their own apartment in the period of record-high interest rates and as a result of the freezing of credit action in 2022, started actively searching for offers to sell flats or houses after the announcement of the government subsidy program. On the Otodom website, the number of searches for apartments for sale increased by over 40% m/m in January 2023. In July, the month in which the application for a loan with government funding was launched, the number of searches in this category reached almost 5 million (+44% y/y).

This increase did not end merely with intentions. Everyone hit the shops: those customers who qualified for the program and those who were not planning to use it. Among the first were those who, thanks to preferential conditions, finally gained creditworthiness, but also those who had not previously planned a purchase, but decided to apply for a subsidized loan in view of the opportunity for a favourable transaction.

Significant increases in sales occurred in 2023. The second half of 2023 was two-thirds better than the same period a year earlier. Otodom Analytics’ monitoring shows that in the best sales month of last year (October), sales were 91% higher than in the weakest (January).

Developers sold the most apartments in Warsaw last year – 17.8 thousand, which constituted one third of sales on the seven analyzed markets. Krakow came second, despite the biggest problems with the level of supply (9.4 thousand). They were followed by the Tri-city (8.2 thousand), Wroclaw (7.8 thousand), Poznan (4.8 thousand), and Lodz (4.1 thousand). Katowice is at the bottom of the list with 2.4 thousand apartments sold, which is 46% more than a year ago. Katowice was second, after Warsaw and Gdansk (57% y/y each), in terms of annual growth in percentage terms.

Apart from the most important markets, attention is drawn to Lublin, where over 2 thousand developer apartments were sold in 2023. It left Bialystok, Bydgoszcz and Rzeszow (sales at the level of 1.5-2 thousand apartments) behind, and with average prices approaching PLN 11,000/m2 it surpassed Lodz and is approaching Katowice.

As a result of such a surge on the demand side, the response of developers was not seen until the end of the year. For many months, the offer was shrinking practically on all markets. This could only bring about an acceleration in the rate of price growth, which was higher last year than in the post-pandemic boom period.

According to Otodom Analytics data, over the year, prices in the most important markets in the country increased from 8% in Katowice, 13% in Lodz, through

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