May 19, 2022

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The housing market is slowing down, but there will be no fall in prices

The housing market is slowing down, but there will be no fall in prices

The ambiguous geopolitical situation associated with the war in Ukraine, high inflation, energy and gas prices as well rate increases The interest has already had a negative impact on the housing market. The developers last year achieved excellent results. Meanwhile, this year they recorded a significant drop in sales. It hasn’t been this bad in a long time.

This trend was noted on Twitter by Tomek Narkun, a real estate market analyst.

The data he posted shows that Declines in sales affect large companies and smaller developers alike. Example? INPRO sales fell by as much as 63 percent in the first quarter of this year. compared to the same period last year. Marvipol also recorded significant declines.

The number of completed apartments is also decreasing. In both January and February, developers completed 6.5 percent. The number of residential buildings is lower than last year – Followed by the data of the Central Bureau of Statistics.

The war in Ukraine had a negative effect on the mood

Dr Damian Kamereczak, chief economist at the Polish Association of Construction Employers, has no doubts that last year’s housing market boom is over.

Dark clouds have descended on the Polish housing market. First, interest rates are rising more and more Banks restrictive credit policy It has significantly limited access to mortgage loans for most residents. Secondly, after the outbreak of the war in Ukraine, many potential customers refrained from the decision to purchase new workplaces – he explains.

But in the developers’ sales offices, the downward movement began with interest rate increases. – This is associated with a significant reduction in the creditworthiness of buyers who realize that servicing such a loan will be too expensive It could shake up their home budget. Therefore, they make purchase decisions more carefully, because they take into account that the loan taken now will be more expensive – explains Patrick Kozyrkevich from the Polish Association of Developers.

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The expert also states that as of April of this year it has come into force KNF recommendations are more stringent. At the moment, when assessing the creditworthiness of the client, the bank must check whether we will be able to repay the loan if the interest rate increases by 5 points. border.

So if we currently have 4.5 points. Basically, the bank will have to make sure of what our capacity will look like when the rate reaches 9.5%. In addition, when granting loans, banks will take into account the increase in maintenance costs of borrowers. These are the factors that are currently inhibiting market demand Patrick Kozyrkewicz says:

It also had a significant effect in lowering the mood among potential buyers Russian aggression against Ukraine. According to Patryk Kozierkiewicz, a similar trend occurred in March and April 2020, that is, at the beginning of the epidemic. – For many people, the current situation is not a good time to buy an apartment, especially since it is a financial commitment of at least several hundred thousand. zloty – He explains.

For now, there will be no hard braking

Agnieszka Mikulska, a housing market expert at CBRE, believes that The current situation will delay the start of new investments, including. Because Construction costs are difficult to estimate. – So far, there is no chance to reach the level of apartment sales from last year. He adds that this will certainly not happen in the coming months.

In his opinion, the However, developer sales are negatively affected by the increase in construction costs and the fact that they are running out of manpower, as many Ukrainian workers working on Polish construction sites have returned home to fight at the front. In addition, energy and fuel prices are rising, and they are also becoming more expensive Building materialsSome go down.

The expert also notes a drop in demand in the housing market. – You can see it, among other things, after increasing the advertising efforts of the developers. Meanwhile, six months ago, when everything was being sold on the spot, the developers practically did not have to advertise – comment.

Tomasz Błeszyński thinks so As a result, what happened a few years ago, when developers lured customers with additional bonuses for the sale of their apartments, may soon be repeated. They offered, for example, kitchen furniture at a price and promotions, for example buy an apartment and you will win a trip abroad.

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See also: Home prices will rise. ‘No one knows yet how much’

Home price increases won’t be amazing anymore

In turn, Ewelina Staruch, a real estate analyst at Centrum AMRON, believes that home price increases will not be as spectacular as they were in 2021 and may not exceed the level of inflation.

In addition, according to her The demand for housing will not decrease, but on the contrary – it will increase even more. a reason? Poland is still one of the last placesC for the number of apartments per person. This deficit may be exacerbated by the resettlement of refugees from Ukraine in Poland. PKO BP analysts estimate that in the next few years an additional 230,000 jobs will be needed. Apartments.

Thus, the current trend of decreasing demand for apartments and selling them may be temporary. In the long run – as it seems – the current situation may positively affect market demand. Some refugees who came to Poland will stay here permanently, and therefore will have to live somewhere – says Patrick Kozyrkewicz.

However, according to Damien Kamyerschak, it is currently difficult to predict how the influx of refugees will affect the housing market. – We still do not know how many of them will eventually remain in Poland permanently – he says.

Nevertheless, our interlocutors agree that the current situation creates ideal conditions for the construction of rental apartments by foreign companies Funds in the PRS market.

– Developers who have to face a drop in demand will try to compensate for this by closer cooperation with PRS funds – says Damian Kamercak. According to the expert, it’s also an opportunity rental market In Poland, you will finally begin to professionally.