The market continues to show a strong dynamic in new developments, although it is slightly weaker than in February and March. In April alone, developers started the construction of 12,500 apartments. This means that in the first four months of the year, the industry began building 54,500 units. Whether this pace will be maintained largely depends on the economic climate and whether the government decides to implement a new housing program. So far, work on this program has been delayed, and this uncertainty is detrimental to both clients and developers.
Assuming the current pace of new investments continues, it can be expected that by the end of the year, the result will exceed the forecasts made in December, ranging between 140,000 and 150,000 units in new investments. This would be great news, especially when compared to the industry’s performance in the last two years, when approximately 115,000 units were built annually (and without the 2% Safe Loan, last year’s result would have been even weaker).
However, maintaining the pace of new developments depends on market conditions. The primary market has been experiencing a decline in sales for several months. April was the weakest month in this regard since January 2023, although the situation cannot be described as bad. At the same time, according to Otodom Analytics data, a record number of reservations were noted, indicating that consumers are waiting for the implementation of the Start Loan program.
“If the government decides not to proceed with the Start Loan program, these reservations might not translate into purchase decisions. The lack of the Start Loan could result in the loss of clients who cannot afford a loan under market conditions. Consequently, this could lead to sustained lower sales levels, which in turn might discourage investors from launching new projects due to higher investment risks and potential financing difficulties,” comments Patryk Kozierkiewicz, an expert from the Polish Association of Real Estate Developers. He adds, “However, given the good results in the first four months, we can be almost certain that by the end of the year, the industry will improve the introduction figures recorded in 2022 and 2023.”
Building Permits
There is also significant activity in new building permits. Compared to 2023, developers obtained nearly 37% more permits (67,000) in the first four months of the year.
This is primarily due to a structural improvement in market conditions. Given the time required to obtain a permit, this statistic reflects investor sentiment approximately 3-4 quarters earlier. It shows that with the increase in sales and the return of clients to sales offices—which occurred about a year ago—investors regained the ability to pursue their investment plans. An essential part of this process is the procedures related to obtaining building permits.
According to the Polish Association of Real Estate Developers, by the end of the year, the number of permits should return to levels seen in 2021-2022, amounting to around 200,000.
Occupancy Permits
In the first four months of this year, developers completed slightly over 39,000 apartments, which is just under 4% less than the same period in 2023. However, it is difficult to predict if this trend will continue, especially considering that fewer investments were started in 2021-2022, which will likely soon be reflected in permit results.
The individual market is already showing much weaker results, with nearly 30% fewer apartments completed than the previous year. This decline seems to be due to unfavorable conditions in recent years, including the rise in building material prices (2021-2022), persistently high interest rates, increased living costs due to inflation, and geopolitical conditions. However, the situation is gradually improving, as seen in the statistics for new individual constructions (a 19% increase compared to 2023).
One thing is certain: without the urgent commencement of a national housing policy, the situation will not improve in the long term. Ad-hoc measures aimed at upcoming elections only exacerbate an already challenging situation in the housing market.
