Converging attitudes

The second quarter of 2008 was the first period since the end of the residential boom in which prices for new apartments fell, according to research by redNet Consulting and tabelaofert.pl.

The research examined average prices for new units in Poland's largest population centers: the Warsaw, Silesian and Tri-city agglomerations and the cities of Kraków, Poznań, Wrocław and Łódź. Average prices for the April-June period were compared with prices from May-July.

According to the research, the overall average May-July price amounted to zł.8,804 per sqm, a 1.32-percent drop on the overall average for the April-June period. Taken individually, the largest drops were seen in the Warsaw agglomeration and Wrocław, amounting to 5.09 and 3.24 percent respectively.

While the average price for new-apartments fell, it still exceeded the average actual transaction price. Crucially however, the gap between the two visibly shrank. In the May-July period, the difference between new apartment prices and transaction prices in the markets included in the research amounted to 11 percent. In contrast, during the April-June period this figure stood at 13.5 percent.

Gdańsk and Katowice were the most stable markets, with new apartment prices actually lower than transaction prices in both periods under study.  The process of price convergence was fastest in Warsaw, where the difference amounted to 13.5 percent in the May-July period, as opposed to 21.2 percent in the earlier three-month period.

The process of convergence is now expected to continue across Poland, to the point where the average new apartment price stands around eight percent below the average market price.

"We are expecting the convergence of prices and [the developers' and buyers'] attitudes to continue until the end of this year. The pace and volume of [apartment] sales, for their part, should gradually increase after the holidays," said the report.