What is happening in the Polish real estate market?
The COVID-19 epidemic is gaining momentum, undoubtedly affecting both our daily lives and the economic situation. According to statistics compiled by Morizon. pl, it also affects the country’s real estate market.
Real estate market demand in Poland – comparison January – August 2020. vs. January-August 2019.
Less demand for residential rentals
The consequences of the coronavirus pandemic have affected the rental housing market the most. In August of this year, demand was down 40% compared to 2019, with that month always standing out as the one with the most movement in the sector. Consumers, i.e. students and workers from the East, faced with the threat posed by the possibility of contracting COVID-19, decided to stay at home. Analyzing the data on a y-o-y basis, the biggest slump in the rental housing market was recorded in April – when a massive quarantine and restrictions were imposed in Poland due to the pandemic. The current critical situation in this market is due to the decision of the authorities of most Polish universities to teach remotely, which in turn means that students do not have to leave their hometowns.
Residential units for rent – demand
January-August 2020 vs. January-August 2019
Demand in the residential rental market in VIII 2020. in Poland’s largest cities – a year-by-year comparison
Lower demand for rental housing, accompanied by an increase in the number of listings, is driving down rents – listing prices are 20% lower than last year. Landlords, in order to increase the attractiveness of their offerings, are choosing both to lower rents and to renovate and modernize apartments.
At the same time, landlords are looking for new ideas to promote the units. These include attractive, featured and highly visible ads, good quality photos and detailed content.
Residential sales market
The current housing sales market is also in crisis. According to an analysis by Morizon.pl, the number of customers ready to buy an apartment dropped by 1/5 compared to August last year. One of the main reasons for the decrease in demand in the residential sales market is a change in the approach of most banks to their mortgage lending policies. On top of this, buyers in fear of losing their jobs in uncertain times of pandemic prefer not to take risks by investing in the purchase of an apartment. They are also often worried that they will not be able to pay the installments.
The deterioration of the housing market is also influenced by the low number of offers of residential units from developers and apartments on the secondary market. As a result, the number of transactions decreases, search time increases, prices stabilize. This is evidenced by a new analysis of the ICM (Apartment Price Index – an indicator of price changes in the Polish real estate market), compiled by Morizon.pl. In August 2020, the value of the index was 1220.7 points, which in turn means that it has fallen by half a percent since the COVID-19 outbreak, a five-month period. If we compare the previous five months – from X 2019 to III 2020 – its value increased by seven percent.
Demand – residential units for sale
January – August 2020. vs. January-August 2019.
Stabilization of home sales market situation
After the government and local authorities banned access to forests and parks and restricted the movement of residents, there was a surge of interest in home sales listings, so the situation in this segment stabilized, causing demand to return to last year’s level (5% year-on-year growth).
This is undoubtedly influenced by both the moderate number of offers and high prices. Being able to enjoy your own garden without restrictions and better living comfort come at a cost. Currently, only a negligible number of potential customers are willing to pay a high price for such facilities.
Demand – home sales market
January-August 2020 vs. January-August 2019
The popularity of allotments is not waning
Plots of land are an invariable hit on the Polish real estate market, demand for them continues to grow, although it is not as high as, for example, in May or June 2020, but certainly higher than in 2019. Several factors had an impact, but one of the most important was the ban on leaving homes and the closure of forests and parks. People buy plots of land to have a piece of land exclusively for themselves, should a similar situation arise in the future. Recently, recreational and construction plots have been the most popular. Demand increased by 70% compared to the same period last year.
Demand – plots for sale
January-August 2020 and January-August 2019