In the second quarter of 2024, demand for new apartments in the capital fell. A total of 2,623 units were sold, 40.7 percent less than in the first three months of the year, according to a new report by CBRE and redNet Property Group. This is primarily due to the expiration of the government’s “Safe Loan 2%” program and prolonged anticipation for the next one. Despite this, offer prices for apartments are still rising. The average cost of a property from the primary market at the end of the second quarter was PLN 17,806 per sq. m., over 16 percent more than a year ago. Further price increases are likely in the coming months, but the pace will be slower.
“The lower demand for apartments in Warsaw was already visible in the first quarter of 2024, and in the second quarter we observed a continuation of this trend. This is mainly due to the end of the government’s ‘Safe Loan 2%’ program, offering subsidized housing loans. Although the new government announced another initiative in January 2024 to support the purchase of new apartments, the introduction of this initiative is delayed and is currently scheduled for January 2025. The former program accelerated consumer buying decisions, and waiting for the next one is now delaying them. As a result, we are now seeing lower sales,” explains Agnieszka Mikulska, a housing market expert at CBRE.
In the second quarter, 2,623 apartments found their owners in the capital, 40.7 percent less than in the first three months of the year. Demand is likely to remain similar, or even lower, in the second half of the year unless new factors stimulating sales emerge.
There are currently 13,000 units for sale, about 15 percent more than in March 2024. In the second quarter of 2024, developers introduced 4,380 units to the market, a similar number to the previous three months. Due to the lower demand, potential buyers can now choose from a wider range of options. This is good news for buyers, but developers must be prepared for a longer sales period.
The average offer price of a new apartment at the end of the second quarter of 2024 was PLN 17,806 per sq. m., a year-on-year increase of 16.4 percent, with inflation of 2.6 percent in June 2024. Meanwhile, the average cost of apartments first introduced to the sale reached a record high of PLN 17,971 per sq. m. There is an increasing gap between the prices of units remaining on offer and those sold. Buyers paid an average of PLN 16,269 per sq. m. for apartments purchased in the second quarter of this year. This may indicate that the increasingly higher offer price levels are becoming unattainable for the typical client.
“In the coming months, a price increase is highly likely, resulting from, among other things, the sale of cheaper apartments, although the pace will be slower. The further rebuild of the offer is also possible, but low sales may delay decisions to launch new projects. Changes in legislation will also be important for the market, not only stimulating demand, like the announced subsidy program, but also affecting supply. For example, the gradually implemented planning reform or new technical conditions for buildings that will apply for a building permit from August 1, 2024,” adds Agnieszka Mikulska, CBRE.
Warsaw is the largest housing market in Poland for both individual clients and institutional investors investing in apartments. Currently, nearly 8.4 thousand units are rented on the PRS market in the capital, and investment plans concern the next 5.8 thousand. PRS investor activity primarily relies on cooperation with developers, who transfer ownership of new buildings to them. Two such transactions were finalised in the capital in the second quarter of 2024.
Source: https://ceo.com.pl/sprzedaz-nowych-mieszkan-w-warszawie-spadla-o-ponad-40-proc-97511
