The COVID-19 pandemic is intensifying, which undoubtedly affects both our daily lives and the economic situation. According to statistics compiled by Morizon.pl, it also impacts the real estate market in the country.
Demand in the Polish real estate market – comparison January – August 2020 vs. January – August 2019
Decreased demand for rental residential premises
The consequences of the coronavirus pandemic have most affected the rental market for residential premises. In August of this year, demand decreased by 40% compared to 2019, with that month always standing out for the highest activity in this sector. Consumers, namely students and workers from the East, decided to stay at home in the face of the threat posed by the possibility of contracting COVID-19. Analyzing the data year-on-year, the greatest stagnation in the rental apartment market was recorded in April – when mass quarantine and restrictions were introduced in Poland due to the pandemic. The current critical situation in this market results from the decisions of the authorities of most Polish universities regarding remote learning, which in turn means that students do not have to leave their family homes.
Residential premises for rent – demand
January-August 2020 vs. January-August 2019
Demand in the rental market for residential premises in August 2020 in the largest Polish cities – year-on-year comparison
Decreased demand for rental apartments, accompanied by an increase in the number of offers, leads to a decrease in rent – offer prices are 20% lower than in the previous year. Property owners are opting for both lowering rents and renovating and modernizing apartments to increase the attractiveness of their offers.
At the same time, landlords are looking for new ideas to promote their properties. These include attractive, highlighted, and well-visible advertisements, high-quality photos, and detailed content.
The market for selling residential premises
The current market for selling apartments is also experiencing a crisis. According to an analysis conducted by Morizon.pl, the number of clients ready to purchase an apartment has decreased by one-fifth compared to August of last year. One of the main reasons for the decrease in demand in the residential sales market is the change in the approach of most banks to mortgage lending policies. Additionally, buyers, fearing job loss in uncertain pandemic times, prefer not to risk investing in purchasing an apartment. They often also fear that they will not be able to repay the installments.
The deterioration of the situation in the housing market is also influenced by the small number of residential offers from developers and apartments on the secondary market. Consequently, the number of transactions decreases, the search time extends, and prices stabilize. This is evidenced by a new analysis from ICM (Housing Price Index – an indicator of price changes in the Polish real estate market), developed by Morizon.pl. In August 2020, the index value was 1220.7 points, which means that since the outbreak of the COVID-19 epidemic, that is, within five months, its value has decreased by half a percent. If we compare the previous five months – from October 2019 to March 2020 – its value increased by seven percent.
Demand – residential premises for sale
January – August 2020 vs. January – August 2019
Stabilization of the situation in the house sales market
After the government and local authorities prohibited access to forests and parks and restricted residents' movement, there was a sudden increase in interest in house sale offers, which stabilized the situation in this segment, causing demand to return to last year's level (5% increase year-on-year).
Undoubtedly, both a moderate number of offers and high prices have an impact on this. The ability to use one's own garden without restrictions and better living comfort come at a cost. Currently, only a negligible number of potential clients are willing to pay a high price for such amenities.
Demand – house sales market
January-August 2020 vs. January – August 2019
The popularity of plots does not decrease
Plots remain a constant hit in the Polish real estate market, with demand still growing, although it is not as high as, for example, in May or June 2020, but certainly higher than in 2019. Several factors influenced this, but one of the most important was the ban on leaving homes and the closure of forests and parks. People are buying plots to have a piece of land exclusively for themselves in case a similar situation arises in the future. Recently, recreational and building plots have been the most popular. Demand has increased by 70% compared to the same period last year.
Demand – plots for sale
January-August 2020 and January-August 2019