How is the property market coping with the coronavirus epidemic?
Ten post dostępny jest także w języku: polski
Successive reports confirm that the housing market – both primary and secondary – is immune to the global crisis caused by the COVID-19 pandemic. According to data from the National Bank of Poland, not only did housing prices per m2 not fall in 2020, but they even increased on average by about 8-9%. This trend is particularly visible in large cities such as Warsaw, Poznań, Katowice, Łódź and, above all, Kraków. Contrary to the predictions of some experts, Poles have not ceased to be interested in real estate in large agglomerations and have not focused exclusively on offers of flats and houses in the suburbs.
Although the trend of purchasing real estate for investment purposes (for short-term rental) has noticeably weakened, the pandemic crisis has not affected the process of purchasing housing for own use:
Buying a flat for yourself or your immediate family, especially children, is still one of the safest forms of long-term capital investment, which remains the most important factor in making purchasing decisions, especially during a pandemic. Poles are currently looking for reliable solutions, are less inclined to take risks, and low interest rates and rising flat prices are accelerating the decision to buy their own flat. What is more, there are no plans for real estate prices to start falling soon,” said Martin Dahl, Dean of the Faculty of Economics and Management at Lazarski University.
The developers were not afraid of the pandemic. Although there are fewer investments underway (according to the Central Statistical Office (GUS), the number of building permits has fallen by 4.5% and the number of commenced constructions has fallen by 7.7%), analyses by Expander and Rentier.io indicate that as many as 37% more units have been sold than last year. The decisive growth was mainly due to secondary market flats, but also to new ones, which increased by 13%. More units were also delivered to customers – the Central Statistical Office (GUS) estimated the growth at around 6% compared to last year. We are talking about over 176,000 completed flats.
If we compare the current state of the real estate market with the previous year, it is difficult to point out significant differences in its most important aspects. The coronavirus pandemic did not affect supply and demand, and even if it stopped the price increase, it was only for a moment, mainly in spring this year. Transaction prices per m2 on the primary market in the first two quarters of 2020 experienced a slight decrease in Warsaw and Wrocław, while they stopped at the same level in Poznań and Gdańsk. Kraków is an example of this, where there was a significant increase in prices by about PLN 500 per m2 during this period. The most desirable districts in the capital of Małopolska are the Old Town and Krowodrza.
Krakow is an ideal place to live and invest. Prices of flats are still lower here than in Warsaw, and at the same time it is one of the fastest growing metropolises. We are observing great interest in flats from the primary market. Contrary to our fears, the sale of flats has not slowed down. In 2020 we managed to sell almost as many units in the Krakow’s Nowa 5 Dzielnica project as in the same period of 2019. It is worth noting that a smaller number of commenced constructions and building permits issued may indicate a lower supply and, consequently, a slight increase in real estate prices in 2021,” said Artur Karczykowski, Marketing Director of the Nowa 5 Dzielnica project.
The price increase in the following years also seems to be indicated by the prices of the land itself.
Land prices have significantly increased at the turn of the last years, in some regions of Poland by several dozen or even several dozen percent. This increase has also been noticeable in recent months – the pandemic in no way influenced price falls. A large part of our clients started looking for real estate, taking into account such factors as comfort and safety of the investment, but the location has come to the fore. Out-of-town properties began to enjoy the same interest as those in cities – small and large. In my opinion, in the next few years there will be no drop in land prices, for a simple reason – there is a growing demand for construction and plots of land in attractive locations are still desirable – adds Tomasz Porowski, real estate investment advisor from Pantera Invest.
Flats on the primary and secondary market are continuously priced. Since 2016, the prices of the former have increased by about 9%, and of the latter by over 22%. In some cities, real estate, both flats and detached houses, have increased by up to 30-40%. The demand for studio beds is also not decreasing. The available offers quickly find buyers – according to the SonarHome report, the average time of expiry of a sale offer is about three months.
Although the coronavirus pandemic had a negative impact on many sectors of the economy, the real estate industry proved to be extremely resistant to it. This is good news for all those who have decided to invest in housing for themselves and their families. Experts predict that property prices will not fall in the coming years – they can only stabilise temporarily and then start rising again. In times of pandemics and increasing credit restrictions, it is a safe investment of capital.
Source: Nowa 5 Dzielnica