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Flats for sale. Prices of used apartments are rising faster than new ones, only Slovakia is ahead of Poland – Expander

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Prices of apartments on the secondary market in Poland in the first quarter of this year increased by 15.1 percent – according to Eurostat data. Expander’s chief analyst Jarosław Sadowski pointed out that in this respect in the entire European Union only Slovakia was slightly ahead of us.

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In recent years, used flats in Poland have risen significantly faster than new ones. “The culmination of this phenomenon took place in the first quarter of 2020, when prices on the secondary market increased by as much as 15.1 percent and the new prices by 6.5 percent. The difference was thus 8.6 percentage points and was the highest since data are available Eurostat “- pointed out Jarosław Sadowski.

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He added that this difference can be seen even more clearly in the long run. Over the past seven years, new home prices have risen by 25 per cent and used ones by as much as 43 per cent.

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Prices of apartments on the secondary marketExpander

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Causes of price increases

Chief analyst Expander Advisors pointed out that such large increases in the secondary market resulted from several reasons. First of all – as he noticed – many people started making money on so-called flipping. It is about buying cheap premises, renovating them and selling at a much higher price.

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“The scale of the phenomenon took on such proportions that it led to significant price increases. In addition, used flats were much cheaper than new ones. Therefore, significant increases were accepted by buyers, because despite the price increases, they were still lower than new premises” – explained Sadowski.

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The analyst also noted that recently there has been more and more talk about the advantages of old settlements over those currently under construction. It is, inter alia, more green leisure space, availability of shops, schools and public transport. “Of course, new buildings have many advantages, but they are built much closer together, so there is little green space. In addition, you will have to wait many years for infrastructure development to the level available in old housing estates” – assessed Jarosław Sadowski.

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However, apartments on the primary market remain more expensive than on the secondary market. And this despite the slower price increase. According to the NBP data, among the 15 largest cities only in Rzeszów new premises are on average cheaper than used ones.

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Sadowski noted that the situation varied depending on the city. “For example, on the primary market in Rzeszów, Opole and Wroclaw, transaction prices in the first quarter were about 20 percent higher than last year. On the secondary market in these cities, growth was smaller” – he pointed out.

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Prices of apartments on the primary marketExpander

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What forecasts

According to the analyst, “it is very difficult to predict now what will happen with housing prices.” “On the one hand, we have restrictions on the availability of mortgage loans and customers’ fear of getting into debt. If this comes to the mass sale of flats bought earlier with a view to earning on rent, prices may fall significantly” – he explained.

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“On the other hand, mortgage loans are now the cheapest in history, which, after calming the moods, may be fuel for further strong price increases. In our opinion, however, the scenario of their stabilization, i.e. remaining at + -5% of the rates observed in the fourth quarter of 2019, is most likely “- added Jarosław Sadowski.

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photo-source">Source of main photo: Shutterstock

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