The real estate market undergoes dynamic changes, while at the same time displaying a certain cyclicity. Numerous economic, social and legislative factors significantly influence it, to which it responds with periodic trends, tendencies or lasting directions of development. What will the sector look like in the coming year? What areas will its transformation cover and what macroeconomic challenges can we expect?
Expert commentary by Dawid Wrona, Board Member and Managing Director for Sales and Marketing at Archicom.
In 2023, the largest housing developers in Poland achieved satisfactory operating results, thanks in part to the government program “Safe Loan 2%,” which was a significant demand stimulator that in turn led to a sales increase. The past few months showed the importance of industry experience and know-how. Although dynamic price management was then the key to success, today it is merely an additional element that will not bring the expected results alone. Currently, the pace of the market is set by supply, and more precisely – the land bank and a thoughtful strategy for its use.
The prices of apartments within new investments no longer rely solely on competition analysis. Simply sticking to what was and is will soon not be enough. Developers are forced to develop a new pricing model based on future land potential. Thus, a “new real estate market” is slowly being formed, in which people and technology will play a significant role. It will often require a revision of existing procedures used in development companies – openness to new yet undiscovered, but also getting rid of fears about creating modern urban spaces.
Key factors for the residential real estate sector
Without a doubt, in 2024, developers’ sales results will continue to be supported by government initiatives. “Start-up Apartment,” which provides additional benefits for borrowers, will follow the “Safe Loan 2%” program that ended at the close of the year. Although its precise assumptions are not yet known, we can expect that developers will not build long-term strategies based on short-term concepts with an unclear future.
Undoubtedly, the most significant challenge for the sector will remain the limited supply of attractive land, which will directly influence the popularity of mixed-use projects.
One of the challenges that the real estate sector will have to face is the level of inflation. According to GUS, it’s average value was 11.4% in 2023. The reading throughout the European Union was sensibly twice lower.
In 2023 in Poland, we observed significant GDP fluctuations quarterly. In the first quarter, our country’s economy developed the fastest in the entire European Union – by as much as 3.9% quarter to quarter. Poland is at the forefront of the EU in terms of the lowest unemployment rate. According to the methodology used by GUS, the unemployment rate in Poland is only 5.0%, which is confirmed by the analysis of the Moody’s agency based on Eurostat data.
