The housing situation in Poland in June 2024

The real estate market is very dynamic. It is influenced by many factors, so in order to be aware of the processes taking place there and to understand them, it is worth analyzing the available data. The more we take into account, the broader our view of the current situation will be. Let's discuss the most important indicators. Once you get acquainted with them, it will be easier for you to decide to buy the property of your dreams in Poland.

The real estate market is very dynamic. It is influenced by many factors, so in order to be aware of the processes taking place there and to understand them, it is worth analyzing the available data. The more we take into account, the broader our view of the current situation will be. Let's discuss the most important indicators. Once you get acquainted with them, it will be easier for you to decide to buy the property of your dreams in Poland

First about loans

The situation on the housing market largely depends on the availability of loans. The difficulty of obtaining a mortgage loan means that fewer and fewer apartments are sold. When access to loans becomes easier, the number of transactions increases. The number of submitted loan applications gives preliminary information on how the level of new housing loan agreements will change within one to two months. A large number of applications also indicates that the demand for premises from borrowers will remain high in the near future (continuing the current trend).

In June 2024, 27.45 thousand potential borrowers applied for a housing loan, compared to 22.01 thousand a year earlier, which means an annual increase of almost 1/4.

The average amount of the loan granted was 442.83 thousand zlotys and was 15.9% higher than last year. Compared to May 2024, it increased slightly - by 1.7%.

WIBOR 3M rate level

The WIBOR 3M amount is determined every working day at 11:00 by the largest banks operating in Poland. Each commercial bank determines the interest rate at which it intends to lend money to other banks. Then, after rejecting the extreme values, they are summed up and the average value is derived from them, i.e. the WIBOR rate. But what does the "3M" mark mean? It is simply the loan term - in this case, it will be 3 months.

The WIBOR 3M rate is the most common interest rate for new home loans. Its reduction and/or margin on new home loans has a positive effect on borrower demand. An increase in the interest rate has the opposite effect.

On 24 June 2024, the WIBOR 3M rate was 5.86%.

Average annual change in prices of building materials

The construction of new real estate is always associated with the need to bear the costs of certain building materials. These are unavoidable costs, which is why they have such a huge impact on construction.

The price index for building materials shows how the prices of a specific type of building material have changed over the year. A significant annual increase (e.g. more than 5%) suggests that developers have felt price pressure on the prices of apartments and houses. This situation encourages investors to increase the price per square meter in current and planned investments - especially when the demand for new premises and houses is high. According to experts, in June 2024, compared to June 2023, the price dynamics amounted to minus 1.3%. In the wholesale channel, the price drop was 0.4%, and in the retail channel - minus 1.9%. Comparing June 2024 with May of the same year, the average price of materials did not change. Analyzing the data as a whole (for the period from January to June 2024 to the corresponding period of 2023), it is clear that their dynamics remain at minus 2.7%.

The number of apartments commissioned and completed by developers and the number of permits for new construction

The Central Statistical Office of Poland publishes these three indicators characterizing the activities of developers on a monthly basis. It is worth remembering that the term "apartments" refers to both apartments and houses. The most important, apparently, is the number of apartments being commissioned, since it shows the mood of developers. In turn, the number of completed housing is largely related to the number of construction projects started about two years earlier. This is the average time it takes for a developer to build an apartment. Let us remind you that premises and houses often appear in developers' offers even before the start of work is recorded by the Central Statistical Bureau, and even before a building permit is received.

According to the Central Statistical Bureau, 16,855 apartments were commissioned in June 2024, which is 7.7% less than a year ago. Developers commissioned 10,812 premises, which is 20.1% less than last year.

In June of this year, building permits were issued for 24,025 apartments. Of these, 16,195 apartments are intended for sale or rent. Construction of 21,229 apartments has begun. Of these, 14,092 were intended for sale or rent. Registered unemployment rate

The Ministry of Labour and Social Policy calculates the preliminary monthly unemployment rate in the country. It does this based on data received from the labour offices subordinate to it. These institutions have information on the number of registered unemployed in the department's area of ​​activity. The final value of the indicator is announced by the Central Statistical Office at the end of the following month.

This most popular unemployment indicator is the ratio of the number of registered unemployed to the economically active population. The result obtained is largely associated with the economic development of the country. A significant increase in the unemployment rate is a signal of a decrease in demand for housing and real estate loans.

According to the Central Statistical Bureau, in June 2024, the registered unemployment rate fell to 4.9% (compared to 5% a month earlier), recording the lowest level in more than 30 years - since August 1990).

Consumer Inflation Index

Consumer inflation is the most popular indicator of inflation and deflation in the world. It is often called the CPI. This indicator is calculated by the Central Statistical Office based on the weighted average prices of goods and services purchased by the average household.

Inflation foreshadows a decrease in demand for residential real estate if it significantly exceeds the rate of wage growth. In such a situation, wages actually fall. It is worth remembering that banks take into account the increase in the cost of living when assessing creditworthiness (for example, based on the social minimum).

According to the Central Statistical Office, prices of consumer goods and services in June 2024 increased by 2.6% compared to the same month of the previous year (with prices of services increasing by 6.1% and prices of goods by 1.3%). Compared to the previous month, prices of goods and services increased by 0.1% (including services by 0.5%, while prices of goods remained at the same level).

Average monthly wages in the business sector

Without a doubt, the level of wages has a huge impact on the housing market. The higher the monthly wage transferred to the account, the greater the opportunity to incur more serious expenses, such as loan installments. The growth of wages (especially real) is a positive factor stimulating the real estate market.

If you want to track the size of wages in Poland and their impact on housing, you should pay attention to the level of average monthly wages in the corporate sector. This indicator takes into account gross wages in enterprises with at least 10 employees and reflects well the general wage trends in the economy.

The Central Statistical Office reports that in June 2024, the average monthly wage in the enterprise sector excluding profit bonuses was PLN 8,144.83.

WIG Real Estate Level

On the Warsaw Stock Exchange, developers have their own special sub-index. This is WIG Real Estate. This is a sectoral index consisting of companies participating in the WIG index and also classified as belonging to the "real estate" sector.

The WIG Nieruchomości stock index takes into account the share prices and dividend income of companies belonging to the real estate sector (including developers). This is a point indicator. Its increase reflects the improvement of investor expectations regarding the state of large real estate companies (including developers).

Conclusion

Unemployment rates, rising interest rates, rising maintenance costs and changing prices for building materials are just the beginning of a long list of factors that affect the real estate market. It does not operate in a vacuum and the current economic situation has a huge impact on this industry.

That is why it is worth knowing how to measure what is happening in the market. To do this, you should use the indicators discussed in the text. Knowing their values ​​and monitoring current data will give you the knowledge you need to make a decision about buying a property.

Source: rynekpierwotny.pl