![New flats finally start cheap. Prices are falling for the first time in several years [WYKRES DNIA]](https://i0.wp.com/bi.im-g.pl/im/70/fe/18/z26207856IER,-.jpg?fit=%2C&ssl=1 "New flats finally start cheap. Prices are falling for the first time in several years [WYKRES DNIA]")
The situation on the market real property is obviously different depending on the region of Poland. Among the largest cities in the country, analyzed by the National Bank of Poland (voivodeship capital cities plus Gdynia), transaction prices of new flats in the second quarter of this year fell the most in Rzeszów (over 5%), Warsaw, Wrocław (nearly 4% in both) and Łódź, Opole, Szczecin and Katowice (approx. 2.5% each). On the other hand, in some cities, prices continued to go up – the strongest (by about 2.7-4.3%) in Kraków, Gdynia and Kielce.
Warning! In the quoted NBP data, the quarters do not exactly match the calendar quarters. The first quarter at the NBP includes data from December, January and February, the second quarter from March, April and May!
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In most provincial cities, the outbreak of the coronavirus pandemic contributed to a slowdown in the growth rate cen. Average transaction price analyzed by the National Bank of Poland for seven cities (Gdańsk, Gdynia, Łódź, Kraków, Poznań, Warsaw, Wrocław; average weighted by the market resources of a given city) fell quarter-on-quarter for the first time in 2.5 years. Not much, by 1.44 percent, but still. For the remaining 10 cities, the weighted average of transaction prices also fell by slightly more than 1%. – it was the first decline in more than three years.
Despite the decline in transaction prices of new flats in the last quarter, a significant increase is still visible over the year. Year on year, the average prices in the seven most important markets in Poland increased by 6.5 percent.
What’s just as interesting, in many cities in recent months The difference between the asking prices and those at which the actual transaction takes place has increased significantly. As noted by Jarosław Sadowski, the chief analyst of Expander Advisors, in the seven largest cities it amounted to as much as 11 percent in the last quarter. The last time we saw such a big difference in 2013. As Sadowski explains, it resulted from the fact that developers raised their offer prices, but at the same time agreed to cuts in transaction prices. What is more, it does not exclude that in fact the scale of the decline in transaction prices in the last quarter was even higher than indicated by the National Bank of Poland, as some of the developers’ concessions are not visible in the prices of, for example, offering a free parking space or a storage unit.
About the developers might have been scared by the crisis and were more willing to make concessions, Dr. Adam Czerniak from SGH also writes on Twitter. At the same time, however, it suggests that this tendency will disappear after Poland exits the recession. He also believes that then the housing needs intensified by the lockdown and low interest rates will support the high pace of price growth.
Bartosz Turek, an analyst at HRE Investments, advises to approach the data on the quarterly decline in transaction prices of new apartments in many cities in Poland with reserve.
There is no certainty to what extent the decline is due to the fact that developers actually cut prices, and to what extent the offer did not include new flats (developers, on the occasion of the epidemic, inhibited the start of new projects), or the fact that some of the In an uncertain situation, it withdrew from previously signed contracts. As a result, premises contracted even a few quarters ago, when the price level was much lower, returned to the offer
– comments Turek. Both he and Jarosław Sadowski emphasize that whether housing prices will rise in the coming months will depend on the development of the pandemic and the related moods in the economy. If Poles fear a loss workingand the banks will not turn on the tap with more loans, it may be conducive to a further decline in prices.
More and more expensive on the secondary market
The transaction prices of second-hand apartments behave differently than the prices on the primary market – in the last quarter only in Białystok, Bydgoszcz and Zielona Góra did not go up. It is about the price change measured by the so-called a hedonic index that compares similar properties in terms of quality.
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In seven major markets in Poland [Gdańsk, Gdynia, Łódź, Kraków, Poznań, Warszawa, Wrocław – przyp. red.] prices of second-hand housing (measured by the hedonic index) went up by 2.3 percent. quarter to quarter and 11.7 percent. Every year. Prices on smaller markets, such as Opole, Kielce, Szczecin and Rzeszów, are growing even faster.
Why didn’t the pandemic stop the growth? – People who sell an apartment once or twice in their life usually find it difficult to come to terms with the fact that they will get an amount lower than planned by several dozen thousand – explains Jarosław Sadowski.
In the secondary market, the pandemic continued the boom, especially in smaller towns. Retailers have adjusted bids at the most inflated prices, but demand remained strong and fueled by crisis ‘bargain hunters’. There was no “fire sale” phenomenon [sprzedaż po wyjątkowo niskiej cenie, m.in. w obliczu problemów finansowych właściciela – red.]
– adds Dr. Adam Czerniak.
