There is no limit to the rise in housing prices.  Supply lags behind hot demand
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The boom in the housing market is in full swing. There are still more people willing to live than there are buildings available. In addition to high demand, price increases are affected and may also be affected in the future by more expensive building materials, making today’s developer price lists only provisional.

Most of the housing in Europe was built in Poland, but there are still a few [Wykres dnia]

Although more apartments were actually added in 2020 in France and Germany, for every 1,000 residents, the largest number of apartments and houses were completed in Poland, according to the Deloitte Property Index 2021 Report. However, this is still not enough to fill one of the biggest gaps housing in Europe.’s real estate price index reading for the whole of Poland prepared for and “Puls Biznesu” in June 2021 was 105.88 points. It was down 0.52 points. higher than in May. A more significant increase was recorded in annual terms. It reached 2.01 points.

The increasing reading of the index and the housing prices are the result of the ongoing boom in the real estate market. As Anna Karai, the Senator’s Senior Real Estate Analyst, pointed out in the second quarter of 2021 Increases were recorded not only in the price of apartments, but also in their sales, which remained at a record level, as well as in the number of apartments in which construction began..

According to data from the Central Bureau of Statistics, the first half of 2021 The developers began building 87.7 thousand square meters. Residential apartmentsIt is a standard result.

– However, this figure is still not enough to meet the ever-high demand – Anna Karai estimates.

The economic environment should not change in the coming months. At the same time, we note the improvement of the situation in the local economy. In June, the unemployment rate fell 0.2 percentage point and stood at 5.9%. The level of employment increased by 0.3 percentage points, and the average salary in the business sector increased by 2.9%. – Comments of the expert Senatorium.

Apartment deposit

The housing market continues to be supported by low interest rates, relatively cheap loans and restaurant-related purchases, which are intended to protect the money invested in apartments from losing value in the face of Inflation reached 5% in July, which we have not seen for a long time. every year.

However, apartments become more expensive faster. According to Cenatorium data, in the seven largest Polish primary markets (Warsaw, Krakow, لودód, Wroclaw, Pozna, Gdask and Gdynia), average bid prices increased by 1.4% compared to May. The increases are also reflected in the urban index reading, calculated for large cities. In June it was 112.23 points. And by 0.79 points. Higher than the month of May by 4.84 points. higher compared to June 2020’s index for Warsaw in June 2021 was 115.7 points. Compared to May, it increased by 0.66 points, and for June 2020 it increased by 3.92 points.

According to Cenatorium data, prices in the secondary market have remained stable, although there is a trend of increasing prices for apartments for sale for the first time.

– People who sell an old apartment, in order to finish new ones, which they are going to take for use, should take into account the higher prices for finishing the new apartment and raise the price – says Anna Karai.

He adds that there are no major problems in finding a buyer. The average exposure time for view, in the case of apartments from the secondary market, was in June to 14 daysWhile the primary market is statistical The ad was shown on average for 18 days.

Either raise the price or register more prices

According to experts dealing with the real estate market, with the price increases seen in the offers, those looking for their “M” will also have to struggle in the fall. Further increases in home sales prices are expected by more than 70 percent. Expert questioning by the senatorium.

– We continue to see a strong interest in anti-inflationary investments in the housing market, which will lead to interest in the purchase of apartments and an increase in prices – says Thomas Błeszyński, real estate market consultant.

In turn, in the opinion of Michał Kubicki, Chairman of the Board of Directors of CMP Center Management Polska, Price increases may continue until the end of the yearOnly a rate hike by the Monetary Policy Board could put a damper on the increased risks.

It was difficult to anticipate such large price increases. Today, in conversations with developers, there is disbelief that prices will rise more than at the end of this year. The first sign of a decline will be an increase in interest rates. Despite the announcement by the head of the Polish National Bank, it may take place later this year, in the wake of raising interest rates in Hungary, which has recorded as high inflation as in Poland – Michai Kubicki predicts. Credit limitation, changes in developer legislation, and fierce competition in land acquisitions may discourage small developers from taking action.

Marcin Krasoń, expert, gave slightly different predictions for the coming months. As he claims, the stagnation in demand, if not over, is slowly coming to an end.

– You can already see a slowdown in demand for home loansThis is closely related to the demand for housing. Supply has limited room to growThis is mainly due to the availability of plots of land or formal procedures, so the only chance for a return to equilibrium is lower demand. It will be useful to everyone – confirms Marcin Krasow. – The current situation for developers is also not entirely favorable, because it is difficult to run a business in unforeseen circumstances. The growth of the healthy organic market will be much better – adds expert.

The rise in construction costs is adjusted by the developers’ price lists

The current increase in housing prices is also affected by more expensive building materials. We may also deal with higher material prices in the coming months, due to continued demand.

As most analyzes show, timber and steel prices have risen the most in recent months, as we wrote in the article “The prices of building materials are rising. Wood, steel and polystyrene are ruthless.

Depending on the type of product, prices increased annually by tens of percent, and in extreme cases exceeded 100 percent. According to the report prepared by PSB Group, in June 2021, on an annual basis, the highest – By 40% the prices of OSB boards have increasedThis is the result of high timber prices in the world markets. The prices of materials from the “heat insulation” group increased by 17.5 percent, roofs and gutters by 12.8 percent, and heating installations by 10.6 percent.

– Developers are still launching new investments, so the demand for materials is increasing. I’m afraid that if the required materials are long overdue and less available, then This may have an impact on the timing of some development investments. On the other hand, developers can start saving with cheaper alternatives, which, in turn, will not be a good solution for the quality and durability of built apartments, for which customers are paying more and more. Tomasz Błeszyński, real estate market consultant, says Tomasz Błeszyński.

As Anna Karai from Cenatorium adds, conversations with developers show that the current price lists are temporary and in the event of another increase in prices, they will be adjusted or simply set – prices will rise.

The high price of building materials, and thus the finishing of apartments, also works in favor of the secondary marketIt offers apartments ready to move into, thus not burdening the impact of high building materials prices.

Supply lags behind demand

Expensive building materials and so-called labor generate another problem – Decreased supply, which does not keep pace with increasing demand.

Construction prices are too highSome developers have decided to put new construction projects on hold until prices stabilize. Let’s add to this the lack of land available for development and ineffective architectural management, as well as the blockage of applications from land and mortgage registries and we have a significant decrease in supply – Analyzes Michao Kubicki.

Among the largest markets for the sale of Polish housing, Gdynia is the worst in terms of completion of the offer, since the highest price increases are recorded – both for the apartments presented in the offer and for the already existing sales advertisements.

– In Warsaw, in the second quarter of 2021, developers began building a much larger number of apartments than in the previous quarters. Work began on the construction of 5.1 thousand. housing, a result comparable with the quarterly average for 2019. However, this number is still insufficient to meet the continued high demand. In the second quarter of 2021, developers in the capital almost sold out. Residential apartments. Certainly, this result would be higher if the choice of offered apartments were wider, says Anna Karai.

However, there are markets in Poland where there is no supply problem. This is for example in Katowice, Kielce and Pozna, where in the first half of 2021 developers began building more apartments than in the whole of 2020. According to the data of the Senatorium, in Poznan, the result achieved in the first half of 2021 was also higher than in the whole of 2019.

However, there are cities where the problem of oversupply does not occur. For example, in Katowice, Kielce or Pozna, in the first half of 2021, developers began building more apartments than in the whole of 2020. In Poznan, they also beat the 2019 result.

Private hut included in the price

The growing demand also appears in the market of single-family homes, which is reflected, among other things, in the prices of construction land. In June, the Building Land Index was 141.52 points. It was 0.45 points. Higher than the month of May by 5.56 points. higher than in June last year.

During the first six months of 2021, the Poles began building 54,274 homesWhich was a 22.3% result. higher than that achieved in the corresponding period of 2020. Meanwhile, individual investors received building permits for 60,386 single-family homes. In this case, the annual increase was 28.9%.

However, as Michao Kubiki notes, Urban sprawl, although accelerating during the coronavirus pandemic, has also been observed ahead of Spring 2020.

This process is affected by several factors. This includes increases in housing prices, limited supply in city centers or parking problems in apartment complexes. The pandemic only adds another brick. However, it is important that the development of technical, social and transport infrastructure keep pace with the spread of buildings to the suburbs – the Chairman of the Board of Directors of CMP Center Management Polska is assessed.

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