Apartment prices up 7.5% y/y, highest growth in years – expert

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Prices for apartments sold by developers in Poland’s six biggest markets increased by some 7.5 percent between April 2017 and April 2018, according to an analysis prepared by RynekPierwotny.pl for PAP. This is the quickest price surge observed over the past few years. “Since the beginning of the boom for residential properties, prices for new units increased by 17 percent, with the majority of the growth recorded over the past 12 months,” said Jarosław Jędrzyński, analyst at RynekPierwotny.pl. He added that the surge was mainly caused by growing construction costs, including land prices, building materials and labor costs, and that the upward pressure should continue until the end of 2018, “although it is difficult to estimate the price cap, where we will start seeing a sharp decline in demand.”

The supply continues to be high, though the trend is slowing down slightly. “Currently there are nearly 47,000 units available in the markets analyzed and it is 6 percent lower compared to a year ago,” Jędrzyński stated. Six main residential markets were included in the analysis: Warsaw, Kraków, Wrocław, Łódź, Gdańsk and Poznań.

According to GUS, 44,908 apartments were delivered in Q1 2018, which is 10.6 percent more than in the first quarter of 2017. Developers accounted for 24,898 apartments over that period, which signifies a 12.1 percent increase. In Q1 2018, authorities issued permits for the construction of 66,766 apartments (including tacit permits, where the investor files the architectural design and is allowed to launch construction unless the relevant authority interjects). This is 10.8 percent more than in Q1 2017. Interestingly, growth rates recorded a year ago were even higher: the number of new units delivered increased by 13.4 percent in Q1 2017 compared to Q1 2016, while the number of permits was 42.8 percent higher y/y.

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