In 2020, Warsaw residents bought almost 18,000 flats. They were not deterred by prices and the pandemic
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The prices of new flats in the capital were on the rise in 2020. In the fourth quarter, buyers paid an average of around PLN 10,800, almost 10% more than a year earlier – according to data from CBRE and redNet Property Group. Although the pandemic caused sales to drop significantly in 2020, the number of units introduced to the market was also lower. As a result, there is less and less choice of new flats in the capital. CBRE experts point out that if the demand from the end of 2020 is maintained, a similar situation is possible this year. This will put further upward pressure on prices.
– The residential real estate sector has proved relatively resilient compared to other sectors of the economy. Low interest rates have supported housing demand both for self-consumption as well as for purchases with a view to investing savings and even for investment purchases by individual buyers. Even in the most difficult period, i.e. the second quarter of last year, over 2,300 new flats found buyers in Warsaw. The easing of restrictions, low interest rates and the effort made to maintain jobs resulted in a rebuilding of demand in the second half of the year – says Agnieszka Mikulska, an expert in the residential department at CBRE.
Supply and demand in balance
At the end of Q4 2020, there were over 14.3 thousand units on offer in Warsaw, 12.1% less than a year earlier. The districts with the largest supply of units on offer were Białołęka, Mokotów, Praga Południe, Wola and Ursus. These five out of the 18 Warsaw districts comprise 61.2% of Warsaw’s residential offer. In terms of new investments, at the end of the year over 3.7 thousand units were introduced to the market.
Flats did not have to wait long for buyers. The last quarter of 2020 was characterised by an increase in demand. Net sales, less returns, amounted to 5.2 thousand flats. This is 13.1% more than in the previous quarter and 18.9% less than a year earlier. In the past quarter, only 53 cancellations of already purchased flats were recorded. In the entire 2020, Warsaw residents bought nearly 18,000 units.
Prices of flats in Warsaw up
Flat prices in the capital were on the rise. At the end of December 2020, the prices of units remaining on offer stood at PLN 11.3 thousand per square metre. This is 1.6% more than a quarter earlier and 5.9% more than in 2019. The average offer price of flats sold in Warsaw in Q4 2020 reached PLN 10.8 thousand per sq m. This is 2.6% more than a quarter earlier and 9.7% more than in the same period of 2019.
– Existing factors supporting demand, such as low interest rates, new housing needs created and realised during the pandemic, will continue to have an impact this year. Speculative purchases may occur due to the observed increase in prices. Institutional investors will also continue to be present on the market, looking for interesting and safe capital allocation options in Poland. However, much will depend on the development of the pandemic. Positive effects of the National Vaccination Programme may additionally strengthen optimism on the market, whereas a strong impact of the third wave could shake demand even to the extent similar to the restrictions of the second quarter of last year – summarises Agnieszka Mikulska.