Will apartment prices continue to rise next year? At what pace? What, in the opinion of developers, will have a decisive impact on the cost of project implementation? The survey was prepared by the real estate service dompress.pl.
Angelika Kliś, board member of Atal S.A., believes inflation and high financing costs have significantly reduced the number of new investments and constructions in the market. As a result, there is a shortage of apartments, especially in larger centers. This supply gap will be felt for a longer time, as it takes time to introduce new projects to the market, on average about 2 years. The cost of production will also be influenced by high land prices, which are also lacking, especially in attractive locations. In such conditions, further increases in apartment prices are very likely, realistically looking at a few percent annually, which in fact corresponds to the current inflation level.
Mariola Żak, Sales and Marketing Director at Aurec Home, says that the price madness on the primary market is in full swing. Currently, we are observing a record increase in the average price per square meter since the financial crisis in 2008. In Warsaw, subsequent price thresholds have been exceeded, for a square meter of an apartment, you have to pay an average of PLN 16,000. Over the past 12 months, developer apartments in the capital have become on average 18% more expensive per meter. The main reason for this is demand driven by the Safe Loan 2% program, which draws apartments from the developers’ offer. The cheapest apartments are disappearing rapidly, and those that remain are becoming increasingly expensive.
According to Cezary Grabowski, Sales and Marketing Director at Bouygues Immoblier Polska, apartment prices will rise, and this is not just the subjective opinion of developers, but above all the result of market analysis of experts. His report on the Warsaw primary housing market for the third quarter shows that the cost of apartments will increase. The size of this increase will primarily depend on supply. If there are no problems with introducing new projects to the offer, at the end of the year, the average price for a square meter. an apartment in Warsaw will be about PLN 17,600 and year on year it will be an increase of about 23.5%.
Andrzej Gutowski, Vice President, Sales Director at Ronson Development, estimates that depending on whether there will be a continuation of the BK 2% program and whether the number of launched projects will increase, prices will grow in the range of 5 to 10% per year.
Małgorzata Ostrowska, Marketing and Sales Department Director at J.W. Construction, unfortunately, everything indicates that apartment prices will continue to rise. Many factors influence this, but the general increase in project implementation costs is one of the most significant. Starting from the beginning, we struggle with a lack of land for investments, which are becoming increasingly expensive as a result. The process of preparing and implementing investments is significantly prolonged due to complicated procedures and finalizing various formalities. And this, as we know, is additional costs.
Dawid Wrona, board member at Archicom, points out that the market is struggling with a shortage of apartments, and considering the needs of buyers, we can expect to deepen the supply gap. Looking at the next few months, we have to take into account further increases in apartment prices, especially in well-communicated projects, designed based on current trends and customer requirements.
The prices of apartments will still grow according to Zuzanna Należyta, Commercial Director at Eco Classic. There’s no other option. The availability of land is limited, the investment process lasts several years, administrative procedures are prolonged, material and labor costs are rising, and all this causes a limitation of supply. With the current increased demand, price increases are inevitable.
In conclusion, looking at the real estate market in the long-term perspective, Damian Tomasik, creator of Alter Investment, notes that prices always rise in relation to the purchasing value of money. Limited land supply coupled with prolonging administrative procedures significantly delay project implementation. Despite increased prices of construction materials, there are still too few projects launched. Therefore, we can expect continuous property price increases unless the conditions of increased housing supply and improved administrative procedures are met.
