Analysis of the housing market in Poland for the first quarter of 2024

Demand for home purchases in Poland remains high, despite a decrease in the number of mortgage applications.

At the beginning of 2024, the acceptance of applications under the “Safe Loan 2%” program was suspended, as a result of which the number of loan applications submitted during the first quarter decreased by 38% compared to the last quarter of 2023. However, on an annual basis, the number of issued loans are still high. It was 186% higher compared to the first quarter of 2023. This was a delayed effect of the “Safe Loan 2%” program, which expired in December 2023. Loans issued from January to March 2024 were primarily in response to applications submitted in December 2023. In March, the program provided another 22% of loans.

At the beginning of 2024, the acceptance of applications under the “Safe Loan 2%” program was suspended, as a result of which the number of loan applications submitted during the first quarter decreased by 38% compared to the last quarter of 2023. However, on an annual basis, the number of issued loans are still high. It was 186% higher compared to the first quarter of 2023. This was a delayed effect of the “Safe Loan 2%” program, which expired in December 2023. Loans issued from January to March 2024 were primarily in response to applications submitted in December 2023. In March, the program provided another 22% of loans.

Home prices continue to rise at double-digit rates.

Last quarter, housing price growth accelerated again. In a group of 17 largest cities in the first quarter of 2024, prices on the secondary market increased by 21% y/y. New offers on the primary market during this period were 16% more expensive than a year ago. This is more than in the III and IV quarters. 2023, when this growth averaged approximately 14% and 10%.

The increase in housing prices observed in the first quarter of 2024 was higher than the nominal increase in wages, which at that time was 12.5%.

In the two most expensive cities – Krakow and Warsaw – prices on the secondary market increased by 34% and 27%, respectively, compared to the fourth quarter of 2023.

In Warsaw, the average supply price of an apartment on the secondary market exceeded PLN 18,200 per 1 m². Prices on the primary market reached 17 thousand zlotys per 1 m².

Apartment prices have increased the most in Krakow. In Krakow, prices on both markets exceeded 16 thousand zlotys per 1 m2. Here prices on the primary market were 16.3 thousand zlotys, and on the secondary market – 16.7 thousand zlotys. In the next quarter, Krakow will probably exceed the ceiling of 17 thousand zlotys.

Price growth exceeding 15% YoY in both markets is also observed in other major cities. On the secondary market, price increases in all cities exceeded 10%.

Of the group of 17 cities analyzed, prices on the primary market only in Lodz, Bydgoszcz, Rzeszow and Zielona Gora were below 10 thousand. zlotys In Zielona Gora, the cheapest place, the average price of 1 m² in both markets is almost half that in Warsaw.

Average price per 1 m2 of apartment among new offers in the first quarter (in thousand zlotys)

Source: PIE research based on properly.io data.

New offers for the sale of apartments maintain a significant upward trend.

In the 17 largest cities, the number of new listings increased by 20% in the first quarter of 2024. In the first three months of this year, in the analyzed group of cities, in general, in both markets, on average, more than 9 thousand new offers for sale were received per week (in the previous quarter there were 7.5 thousand).

This is the highest result since mid-2022. This is mainly the result of increased developer activity. During the quarter, the number of sales on the primary market increased by 53% compared to the previous year.

For comparison, in the secondary market this growth was significantly lower and amounted to only 8.9%. There are many signs that high prices are encouraging developers to introduce additional projects for sale.

Average prices of new offers and price increases per 1 m² of apartments in 17 largest cities in the first quarter of 2024.

Experts predict that home prices will continue to rise in the coming months.

This will be influenced by continued wage growth in the economy and a continued stable economic situation, albeit with slightly higher inflation than now - likely rising to more than 4% in the second half of the year. This will also be influenced by the still limited number of new construction projects that can be included in commercial proposals. Although developers are currently implementing a record number of projects, most of them are in the early stages of implementation. This will limit the number of projects that can be launched in the coming quarters.

Rental prices are relatively stable as supply increases.

In the first three months of 2024, the supply of new rental apartments increased by 26% compared to last year. At the same time, given the growth in the supply of apartments for rent, which was also observed in the previous quarter, prices in the largest markets are stabilizing. In the first quarter of 2024, in the 17 largest cities in Poland, renting an apartment was expected to cost on average 4% more than in the same period in 2023. In none of the analyzed cities did prices increase by more than 8% y/y, and by the two largest markets - Warsaw and Krakow - grew by 3%.

Source: portalnieruchomosci.com