The past two years have been marked by the pandemic, the war and the galloping inflation, which have significantly impacted the Polish economy, including the Polish housing market. The accompanying interest rate rises, very high prices of building materials and the pervasive uncertainty surrounding the future of the global economy are just some challenges faced by developers, constructors, investors and private buyers looking for accommodation.
“Limited affordability to buy flats, coupled with the influx of Ukrainian refugees, has pushed rental remand across Poland to record levels. By no means, however, is this a result of only recent market changes and developments. Despite the robust development activity and boom in recent years, Poland continues to face a structural shortage of dwellings and it is feared that this deficit will be long-term and serious,”
- comments Katarzyna Lipka, Head of Research, Cushman & Wakefield.
The new build market has come a to halt…
Both the high prices of building materials and tighter lending requirements have caused developers to suspend new projects. The number of new construction starts in August 2022 was down by 23% compared to 2021. Given the current situation in the new build market and the weaker demand from individual buyers, business diversification into build-to-sell (BTS) and build-to-rent (BTR) is likely to be an attractive option for many developers, helping them to get through the hard times.
New build asking prices in the seven largest Polish cities have increased by 66% in the last five years, posting a year-on-year gain of 15% last year alone. Of the biggest residential markets in Poland (Gdansk, Gdynia, Krakow, Łódź, Poznań, Warsaw and Wrocław), Poznań and Gdansk witnessed the sharpest rises of 21% and 20%, respectively, last year. Price growth is expected to cool in the coming quarters, with price adjustments on the cards.
