In the second quarter of this year, there was a drop of several percent in transaction prices on the primary market in Warsaw, Wrocław, Łódź and Gdynia, according to a report published by the National Bank of Poland. In the case of apartments on the secondary market, transaction prices increased in all cities, but the growth dynamics slowed down.
Narodowy Bank Polski prepared a report on home prices and the situation on the residential and commercial real estate market in Poland in the second quarter of 2020. The information was prepared by the Financial Stability Department for the needs of the NBP authorities. The Bank emphasized that the opinions expressed in the publication are those of the authors and do not represent the position of the bodies of the National Bank of Poland.
According to the authors of the report, the restrictions in force resulting from the COVID-19 pandemic have contributed to the reduction of activity also on the real estate market. “In the second quarter of this year, there was a strong reduction in activity on the housing market – the number of housing construction contracts sold in the largest primary markets was lower by more than half compared to previous periods” – we read.
As he added, “the cost of housing construction continued to rise as a consequence of high construction demand in the entire economy. There was a decline in average transaction prices of apartments in the primary market of some cities and their further increase in the secondary market”. It was noted that the available data on the commercial market do not yet cover the pandemic period.
Housing prices during the pandemic
According to the authors of the report, the impact of the pandemic on the housing market “is complex and prices in the primary and secondary markets have moved in different directions.” “The asking prices of newly introduced apartments on the primary market continued to rise. At the same time, developers limited their supply, hoping to raise or maintain the market price,” it was written. As indicated, high offer prices may also be subject to various types of promotions, which facilitates sale.
The diversified situation concerned transaction prices, i.e. prices actually paid for the property, on the primary market. The report shows that prices fell in Warsaw – by 3.9 percent, in Wrocław – 3.8 percent, and Gdynia – by 3.4 percent. Prices in Łódź decreased by 2.7 percent. On the other hand, an increase of 4.3 percent was recorded in Krakow. A slight increase by 0.2 percent was also seen in Poznań.
“In the secondary market in the largest cities, the demand for owned apartments slightly decreased. In the analyzed period, there was a decrease in asking prices in Warsaw and in the group of 6 cities and their increase in the group of 10 cities. growth has slowed down “- we read.
According to the authors of the report, a certain “inertia of the secondary market in relation to the primary market is a typical phenomenon, as the secondary market is made up of individual sellers who are not inclined to lower prices and can often postpone the transaction over time”. As they noted, hedonically adjusted prices were also rising, which means that similar flats were sold for more than the previous quarter.
As indicated in the report, until the end of the second quarter, there was a slight impact of restrictions related to the COVID-19 pandemic on the current loan disbursements.
“The value of new PLN-denominated housing loan agreements for households (excluding renegotiated agreements) amounted to approx. PLN 13.0 billion in the discussed quarter, i.e. it was lower by approx. PLN 1.9 billion (12.5%) compared to the value of in the previous quarter and lower by approx. PLN 1.6 billion (11.2 per cent) compared to the second quarter of 2019. ” – we read.
Number of completed flats
The authors of the report noted that in the second quarter, a high number of flats completed in Poland was recorded, slightly lower than the record number in the previous quarter. According to data from the Central Statistical Office of Poland, about 47.5 thousand apartments were completed in this period. This is approximately 0.2 thousand more compared to the second quarter of 2019 and approximately 2 thousand less than in the previous quarter.
The number of flats in which construction has begun has decreased compared to previous record periods. “According to data from the Central Statistical Office of Poland, in the second quarter of 2020, the construction of about 47.4 thousand apartments was started, i.e. less by about 14.1 thousand compared to the second quarter of 2019, and by about 5.1 thousand less than in the previous quarter” – we read.
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