Poles Want HOMES
Difficult access to mortgages, high inflation, and rising prices were not inconsequential for the housing market. Nonetheless, flats remain extremely sought-after in Poland
Before the coronavirus pandemic, between 2011 and 2019, the number of housing units completed in Poland increased by 58 per cent. 2019 was a record year in this respect, with 207,200 units built, or about 5.4 per 1,000 inhabitants. However, Poland is still facing a housing deficit, according to 'The state of housing in Poland' report, prepared by the Ministry of Economic Development in March 2020. The report notes that Poland has around 386 dwellings per 1,000 inhabitants. Among EU countries, a weaker result was recorded only in Slovakia (369 dwellings). In Germany, this ratio was 509, in Hungary 456 and in the Czech Republic 455.
Such a deficit persists to this day, although, as analysts have estimated, the threshold of 400 dwellings per 1,000 inhabitants was crossed in Poland at the beginning of 2022.
How Much is Being Built
As REDNET Consulting data shows, in 2022, sales of new dwellings on Poland's six largest markets shrank on average by over 45 per cent, with the largest year-on-year declines recorded in Wrocław (49.1 per cent) and Warsaw (48 per cent), and the smallest in Poznań (41.4 per cent) and the Tri-City (42.2 per cent).
Nonetheless, last year was still one in which investments, which were primarily the work of Polish companies listed on the Warsaw Stock Exchange, were in full swing. Developers, which include Archicom, Atal, Dom Development, Lokum Deweloper, Develia, Echo and Marvipol, among others, completed and sold a total of 143,800 flats, compared to 141,300 in 2021. This, however, resulted largely from projects that were started earlier and whose completion time was just last year. In 2023, supply is already expected to be lower, as evidenced by a smaller number of new investments being undertaken. According to Statistics Poland (GUS), developers launched only 115,200 of them in 2022, compared to 166,200 in 2021. In January 2023, in turn, developers began construction of only 5,817 flats. This is over 20 per cent less than in January of the previous year, according to GUS data. It is also the smallest number since 2016.
“In total, 60–70 thousand flats will be built this year, which is as much as 100 thousand less than in 2021”, calculates Konrad Płochocki, vice-president of the Polish Association of Developer Companies.
It Will get Better
Developers are therefore waiting for better times, i.e. for return of buyers. Today, due to the difficult access to mortgages, the only buyers are usually people who have cash. There are more and more of these, but because of Poland's history in the 20th century (including the devastation of World War II and then subjugation by the Soviet Union), that group is not overly numerous yet.
The prospects are promising, though. Poland has gained more than 1 million additional consumers in the refugees from Ukraine. It is expected that the mortgage market will be unblocked by the recent decision of the Polish Financial Supervision Authority (KNF), relaxing the conditions for assessing creditworthiness. On top of this, according to the latest reports, the government is planning to introduce a government-subsidised 2 per cent loan for the purchase of a first home for people up to the age of 45. Inflation is also expected to decline over time, which will affect mortgage rates. The pace can be debated, but there is no doubt that Poland is moving towards the living standards of Western Europe. ©℗
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