that 2014 will be better than 2013
After years of falling apartment prices, things are starting to look up for residential developers in the Polish market. Prices have been stabilizing almost throughout the whole of 2013, and even began to inch up in the second half of the year.
In November 2013, average offered prices increased in almost all major Polish cities, compared to the previous month, with the strongest gain noted in Gdańsk (1.0 percent) and Poznań (0.9 percent). The biggest drop was recorded in £ód¼ (1.5 percent) and Olsztyn (1.1 percent).
Source: Central Stastical Office
Still, 2013 was not an easy year for the residential market. Offered prices fell over the past year in all major Polish cities by an average of 2.5 percent, according to data complied by advisory Open Finance and the Domy.pl real estate portal. However, the decline in the past six months stood at only 0.7 percent.
Demand in 2013, and particularly towards the end of the year, was influenced by two major factors. On the one hand, the new bank recommendation issued by the Financial Supervision Authority, which precludes banks from granting 100 percent loan-to-value mortgages, prompted people to buy homes on current terms by the end of 2013.
“A lot of people, seeing that prices are already going up and there are increasingly few apartments to choose from, decide to buy now instead of waiting until next year. More clients also buy apartments as an investment,” said Teresa Witkowska, sales director at Red Real Estate Development.
On the other hand, people who have not yet purchased an apartment or a house and are under 35 years of age will be able to apply for government subsidies within the “Mieszkanie dla M³odych” (“Apartments for the Youth”) program, which will go into effect in January 2014. It is expected to drive demand particularly in outlying, cheaper districts of major cities.
Construction picks up
Developers are also beginning to notice the rebound on the market and have already started increasing construction activity, albeit slowly. Construction on 9,393 housing units was launched in November, 1 percent more than in the same month last year.
After subtracting houses built by individuals and housing cooperatives, 4,886 units were launched, 2.2 percent more than a year ago. October figures were even more optimistic, as construction on 13,736 new apartments was launched, 34.2 percent more than in October 2012.
While somewhat skeptical about the effects of the subsidy program, developers seem to be more interested in the Apartments for Rent Fund, which state-controlled lender BGK is preparing to launch. The fund will acquire some 20,000 units which it will rent out at preferential rates. Polnord is looking to launch an investment in Warsaw’s Wilanów district, with tiny 19-sqm studios, hoping to sell at least some of them to BGK.
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