In 2023, the sale of new apartments in the seven largest metropolises hit a five-year record. Unfortunately, the same cannot be said about the supply of premises. The large imbalance between demand and supply was the main cause of double-digit increases in the average price per square meter. Could history repeat itself in 2024?
“No one probably expected such a strong rebound in apartment sales in the first months of 2023, after the collapse in 2022,” admits Marek Wielgo, an expert at RynekPierwotny.pl.
According to BIG DATA from RynekPierwotny.pl, developers signed the most contracts in the third quarter of last year. While the fourth quarter was not as good for developers as the previous one, the spectacular sales growth of new apartments in 2023 cannot be overlooked. In the seven major metropolises (Warsaw, Krakow, Tricity, Wroclaw, Lodz, Poznan, Upper Silesia-Zagłębie Metropolis), developers found takers for about 65.7 thousand apartments. This result is a two-thirds better compared to the previous year and the best in five years.
In 2023, almost 20.8 thousand apartments were sold by Warsaw developers, a number last achieved in 2019. In Krakow, the Tri-City, Lodz, and the cities of the Upper Silesian-Zagłębie Metropolis, record annual apartment sales were reported.
It’s clear that the government’s “2% Safe Mortgage” program was the catalyst for this avalanche of demand. Unfortunately, development companies did not respond with a corresponding increase in supply. In 2023, they introduced about 43.9 thousand units for sale. As a result, there was a significant imbalance between demand and supply, especially visible in Krakow, where the supply of apartments decreased by 45% compared to 2022.
This limited supply was a major factor in the rapidly increasing average price per square meter. In addition to developers raising prices, the cheapest apartments disappeared first from the offer, thus increasing the average price per square meter.
Given the moderate increase in supply in the fourth quarter of 2023, there may be room for optimism. The gap between sold and added apartments narrowed, indicating some stabilization in the market. However, whether this trend will continue remains to be seen.
*Author: Marek Wielgo, Expert at RynekPierwotny.pl*
