February in the property development market confirmed that despite the discontinuation of the BK2% programme, there is still strong demand for property purchases. Developers sold 4.6 thousand properties in the seven largest markets in Poland. This represents an increase of 9% mom and 17% yoy. At the same time, they introduced 4.7 thousand new properties to the market. While not a record result in the last 12-month period, it is evident that the property offering is rebounding in most cities. However, prices are still rising, with Krakow joining the list of cities with an average price above PLN 15,000 per square meter.
Developers active in the seven largest markets in Poland can consider February a very successful month. The 4.6 thousand properties sold are a result close to the average of the last six months, but 9% better than a month ago and 17% higher compared to the same time last year. This suggests that the level of property sales is stabilizing at around 4.4 thousand per month.
There were more significant changes on the supply side. After a period of high demand in the second half of last year, developers are still catching up with the supply. According to Otodom Analytics data, in February they introduced 4.7 thousand new properties for sale on the seven largest markets, which is 12% less than in January. However, it is still a good result – the fourth highest in the last 12 months and 139% higher than a year ago.
As a result, at the end of the month, the total developer offering in Katowice, Krakow, Lodz, Poznan, Tri-City, Warsaw and Wroclaw was nearly 3% higher than in January totalling 41.2 thousand properties. This is still 8% less than in February 2023.
Despite the generally stable level of sales and a rebounding supply, the situation in the largest Polish markets is mixed, and February brought some surprises.
In Wroclaw, after several weaker months, buyers were once again eager to purchase properties. In February, developers sold nearly 700 properties on the local market. This is half more than a month before and the most since September 2023. Although the number of new properties introduced in February was half less than in January in this city, buyers had just over 5 thousand properties at their disposal, which is 2% more than a month earlier.
Poznań surprisingly ranked second in terms of the number of developer properties introduced for sale, just behind Warsaw. More than 890 new properties hit the market in the capital of Wielkopolska. This is the third-highest result in Poznan’s history and more than appeared in Krakow and Tri-City combined in February.
However, a decline in developer activity has been visible in Krakow since the beginning of the year. In January and February, just over 1000 properties were added to the city’s offering. As Otodom experts underline, this is definitely too little for such a large market. At the same time, the level of sales in Krakow is not impressive (below 600 properties in February), which may not be due to customers’ reluctance to buy but to the low supply level.
Analysing the sales time, in February a gradual improvement was seen in cities where the situation was difficult. If sales remained at the level of the last three months, and no new projects entered the market, the supply would be depleted fastest in Warsaw (2.3 qtr) and Krakow (2.4 qtr). However, this is respectively 0.5 qtr and 1 qtr longer than in September 2023.
In the cities where the situation was favourable, there is a higher risk of an oversupply of developer properties. This applies primarily to the Lodz market, where at the sales level of the last three months, the supply would last for a year and a half.
The improving situation has led to further price increases. In February, Krakow joined the group of cities where the average price per square meter exceeded PLN 15,000. Thus, besides Warsaw (average PLN 16.5 thousand per square meter) and Gdansk (PLN 15.1 thousand per square meter), it has become one of the most expensive locations in Poland. Where is it the cheapest? Still in Lodz, although even here, after breaking the threshold of PLN 10 thousand per square meter in January, prices rose in February by approx. PLN 300 per square meter.
Unfortunately, we do not have good news for those who are considering buying a property and are waiting for price drops. The conclusions from the analysis of property prices in developer investments introduced for sale in February in the largest Polish cities are clear. On all surveyed markets, properties in projects introduced in February were more expensive than those already offered. The change in technical conditions, which will come into force in 2024, will unfortunately contribute to further increases – summarizes Katarzyna Kuniewicz, director of research at Otodom Analytics.
