On a downward spiral

According to consultancy JLL|REAS, in the second quarter of 2019, developers operating in the six biggest Polish cities sold 15,100 apartments, or 8 percent less than the previous quarter. It was also the worst result in one and a half years. A price surge in 2018 discouraged many potential buyers from purchasing apartments. But nothing indicates that prices could, at the very least, come to a halt – developers are still hiking them up to offset their spending on increasingly expensive plots for development. According to JLL|REAS, prices of housing units in Warsaw, the Tri-City and Kraków increased by a whopping 11 percent last year and crossed the all-time highs from late 2007, while in Łódź they are slowly getting close to that.

All the signs are that the most optimistic slowdown scenario for the market will play out – a gradual decline in demand coupled with a corresponding reduction in supply. If neither of those indicators, especially demand, experiences a sharp drop. In many areas, investors who buy apartments with short-term rentals in mind still account for 30-35 percent of all transactions. The hotel industry – losing out to private apartments – is lobbying fiercely to introduce statutory restrictions on such activities (like it was done e.g. in the capital of Germany). If that were to happen, a large group of buyers would disappear from the market in a short time, many units would also be offered for sale by people trying to quit such investments quickly. That could have serious repercussions for the market as a whole.

Can this scenario come true? How long will the slowdown last? What apartments will buyers look for in the years ahead? Participants in the 13th edition of the “Polish Residential Market” conference, to be organized by Nowy Adres S.A. on 21 and 22 October at the Hilton Hotel in Warsaw, will be searching for answers to these and many other questions. This largest and most prestigious meeting for the Polish residential sector is attended each year by nearly 500 biggest and most experienced players in the Polish market: developers, representatives of mortgage banks, general contractors, agents, architects, producers of construction materials, analysts and others. The programme, prepared by market practitioners, not only identifies the most pressing and important problems of our residential sector, it also tries to suggest concrete solutions to them. As usual with Nowy Adres conferences, you will be able to broaden your participation in the event by arranging meetings with other participants through the unique platform Match Maker. This solution makes it possible to establish new business contacts, which is often as beneficial as the knowledge acquired at the conference.