The housing market is currently speaking with two voices. After a strong start to the year, developers are clearly taking a more cautious view of sales and, in most cases, expect no changes to price lists. Buyers, however, remain afraid of rising prices, according to the May Developer Sentiment Index prepared by the housing portal Tabelaofert.
Most surveyed developers — 70% — expect current price lists to be maintained alongside a slowdown in the pace of sales. At the same time, an IBRiS survey for Tabelaofert shows that in Poland’s largest cities as many as 58% of respondents expect apartment prices to rise. This shows that although the market has clearly slowed in terms of sales expectations, buyers still strongly fear that postponing a purchase decision may mean higher prices in the future.
“The May decline in sales sentiment is not surprising. It reflects quite well what can now be seen in sales offices: there are fewer customers, purchase decisions take longer, and the mere presence of an interested buyer no longer means a quick transaction. The market has not frozen, but the moment when developers could expect demand to accelerate by itself from month to month has ended. Now every sale simply has to be fought for more actively — with price, product, location and flexibility in talks with the customer,” comments Robert Chojnacki, founder and vice-president of the housing portal Tabelaofert.
Far fewer companies expect sales to accelerate further
The decline in the May Index is mainly driven by a sharp reduction in the number of companies expecting the pace of sales to continue rising. In May, 29.5% of developers gave this answer, compared with 53.3% in the previous survey.
This means that the group of respondents counting on further market acceleration has almost halved. Such a strong shift shows that earlier optimism has very quickly collided with a more demanding sales reality.
At the same time, most companies do not yet expect the situation to worsen. The most frequently selected answer was the maintenance of the current pace of sales, indicated by 53.4% of respondents. However, 17.2% of surveyed developers now expect sales to decline.
This is not a picture of a market in collapse, but it is a market that is clearly losing comfort. Fewer and fewer companies expect demand to accelerate automatically, while more and more assume that the coming months will require more active work with customers and stronger competition between projects.
“This reading clearly shows a change in the market phase. Until recently, many developers assumed that sales would continue to accelerate almost by momentum. Today, the dominant assumption is increasingly that the priority will be to maintain the current pace. That is a major difference. The market has not collapsed, but it has become much more demanding: weaker projects, poorer locations or overly ambitious prices will be verified by customers much faster,” adds Robert Chojnacki.
Developers do not expect price cuts, while buyers fear increases
Price data show a much calmer picture than the one visible in the public debate about the housing market. In the May survey, 70.1% of developers expect no changes to price lists, 22% expect prices to rise, and 7.9% expect declines. This means that most developers currently see neither room for strong price increases nor space for broad price reductions.
The Apartment Price Change Index fell from its previous record reading, but remains positive. This means that developers’ price expectations have weakened, but have not shifted towards forecasts of declines. The market more often assumes that current price levels will be maintained rather than clearly corrected.
One of the reasons developers do not expect broad price cuts is the cost of delivering projects. Companies point to the prices of construction materials, transport, contracting work and project financing. Therefore, weaker sales expectations may limit the willingness to raise prices, but they do not automatically create room for price reductions, especially in new projects entering the market.
Against this background, the mood among potential buyers is clearly different. According to the IBRiS survey for Tabelaofert, 58% of respondents in the largest cities expect apartment prices to rise. Only 7.9% expect price declines, while 17.5% expect stabilisation.
This shows that customers are still viewing the market through the lens of experiences from recent years.
“There is currently a clear discrepancy in price expectations between developers and buyers. Companies most often assume that current price lists will be maintained, while customers are much more likely to fear price increases. This is the effect of the memory of the previous cycle, when apartment prices rose quickly and delaying a purchase decision often worked against buyers,” comments Katarzyna Tworska, Managing Director of Rednet24.
Suburbs connect developers and buyers
The May survey also shows a clear shift in thinking about the direction of new housing development. When asked what would be better for the market — building more apartments in city centres or developing suburbs with good public transport — developers clearly pointed to the second option. Suburban development was chosen by 75% of respondents, while 18% indicated investment in city centres and 6% supported a combined approach.
“This is a very pragmatic choice. City centres will remain attractive and prestigious, but their supply potential is increasingly limited. There is a shortage of land, plot prices are high, and preparing projects can be complicated and expensive. As a result, new projects in city centres require prices that are increasingly difficult to reconcile with customers’ more cautious attitude,” adds Robert Chojnacki.
Suburbs offer greater land availability, the possibility of delivering larger projects and an opportunity to offer bigger apartments at more acceptable prices. The quality of the surroundings, access to greenery, functional floor areas and the possibility of hybrid work are also gaining importance.
However, there is one key condition: good public transport. Without it, suburban development risks turning into chaotic suburbanisation. With it, it can become a real response to market needs.
Importantly, potential buyers think in a similar way. The IBRiS survey for Tabelaofert shows that 73.4% of respondents support the development of new housing estates outside city centres, provided they have good public transport links. Densifying existing parts of cities was indicated by less than 15% of respondents. This means that, in this area, the expectations of buyers and developers are exceptionally aligned.
“For years, suburbs were treated as a compromise. Today, increasingly, it is the city centre that is the compromise: smaller space, higher prices and limited availability of new projects. If suburbs come with good public transport, the choice becomes obvious for many families. Developers can see this too — where land in city centres runs out and project economics stop adding up, the market will look for new directions,” comments Ewa Palus, chief analyst at the housing portal Tabelaofert.
This theme fits well with the discussions held during Tabelaofert TALKS, where the impact of demographics on the future of the housing market was strongly emphasised. The market will no longer be able to rely solely on the belief that demand will appear by itself. Matching the offer to the real possibilities and needs of households will become increasingly important.
The May index therefore shows a market entering a phase of cautious realism. Developers see a weaker pace of sales, but do not believe in deep price cuts. At the same time, they are increasingly clearly indicating that future supply growth will move beyond strict city centres — provided that suburbs are well connected and designed as fully fledged places to live.
Source: CEO.com.pl
