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    New Housing Market Trends Revealed by NBP

    The National Bank of Poland (NBP) has released new data shedding light on the state of the housing market, offering insights into both the residential and commercial sectors. According to the report titled “Information on Housing Prices and Market Conditions for Residential and Commercial Real Estate in Poland in the Fourth Quarter of 2023,” several key trends have emerged.

    In the fourth quarter of 2023, a total of 59.1 thousand apartments were completed, marking an 18 percent decrease compared to the same period in the previous year. However, this figure represents a notable 20 percent increase compared to the third quarter of 2023. The NBP also reported that permits were issued for the construction of 66.8 thousand apartments, indicating a rise of approximately 7 percent compared to the previous quarter and around 11 percent compared to the fourth quarter of 2022.

    Notably, construction costs continued to rise, encompassing materials, labor, and equipment rental. There was also renewed interest in purchasing building plots, accompanied by an increase in their prices. Additionally, transactional rental rates per square meter and nominal transactional prices per square meter for new apartments in primary markets witnessed higher growth rates compared to previous quarters.

    The report highlights that nominal average transactional prices per square meter for new apartments increased both quarterly and annually, particularly in Krakow, Wroclaw, and Gdansk. Conversely, they decreased only in Gdynia. Real transactional price increases relative to the Consumer Price Index (CPI) were observed quarterly and annually, indicating that inflation growth was lower than housing price growth. Meanwhile, real dynamics relative to wages were negative in the fourth quarter of 2023, both quarterly and annually, implying that wages were increasing faster than housing prices.

    On the secondary markets, nominal price dynamics increased quarterly, notably in Krakow and Warsaw. However, the annual nominal price dynamics relative to the CPI and wage dynamics remained negative across all markets, particularly in Lodz, Gdynia, and Warsaw. There was sustained demand for older, well-located, but smaller apartments due to lower overall purchasing costs.

    NBP noted a rise in the number of apartments offered for rent in 2023, attributed partly to the utilization of apartments purchased during the 2020-2022 boom period when many investors opted for buy-to-let purchases. Renting an apartment became comparable to buying one in the fourth quarter of 2023, considering interest rates and rental rates.

    The professional rental market is expected to further develop in the coming years due to the unstable real estate market, the attractiveness of the housing market in Poland compared to other European countries, and persistently high nominal mortgage costs.

    NBP reported a significant increase in the value of new household agreements for złoty-denominated housing loans in the fourth quarter, reaching 25 billion złoty, representing a 65 percent increase compared to the previous quarter and approximately three times higher than the fourth quarter of 2022. This surge in demand for loans was attributed to the “Secure 2 Percent Loan” program launched in July 2023.

    The report also indicated a significant revival in the initiation of new projects by developers in the fourth quarter of 2023 compared to the preceding three quarters. Surveyed entities expressed intentions to increase their sales offerings by 71 percent in 2024 and by 42 percent in 2025 compared to 2023. Additionally, 45 percent of apartments under construction by the end of 2023 were already sold.

    Regarding the commercial real estate market, the report suggests stability, although the two largest segments, namely office and commercial-service, continue to face challenges compared to pre-COVID-19 levels.

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