Prosperity in the residential market in the biggest Polish cities seems to be coming to an end, according to REAS consultancy, 15 percent fewer apartments (in Warsaw and Wrocław a whopping 25 percent) were sold in the second quarter of 2018 than in the first. It is the first such drop in sales in nearly five years.
Recent years have been a bumper time for the Polish residential sector – sales records were broken every quarter, buyers lined up as soon as the first shovel hit the dirt in a new project. Both the ever popular small apartments and large, multi-room dwellings sold well, the latter purchased to rent by cash buyers who, faced with near-zero profits from bank deposits, saw properties as a suitable investment alternative. As developers kept providing an adequate supply, prices remained constant or rose only slightly. It appears, however, that this golden period is coming to an end – because developers have to face two rather significant problems, which are an upsurge in prices for general contracting and construction materials and a low availability of new land suitable for development.
Plots are in short supply while those available in the market are hitting astronomical prices. Developers have already built up their land banks and have to acquire more land, at very high prices. Combined with a weakening supply, this has to be reflected by higher prices of apartments on offer, according to REAS consultancy, prices in some cities (including Warsaw and Kraków) increased by as much as 5 percent quarter-to-quarter. Indeed, these rapidly rising prices are seen by analysts as the cause of the aforementioned weakening of the sales activity.
Will this trend strengthen or reverse – there are chances to increase supply and put a halt to price increases – this and other problems of the development industry will be discussed by the participants in the 12th edition of the “Polish Residential Market” conference, to be organized by Nowy Adres S.A. on 22 and 23 October at Warsaw’s Hilton Hotel.
One of its special events will be a lecture by Jan Knikker, partner at the legendary MVRDV architectural studio, titled “The city – a multicultural melting pot, the city – a future challenge”. Major market practitioners – developers, representatives of mortgage banks, advisors, architects, agents, analysts, general contractors – will also discuss things like new technologies in housing, the growth of the market for apartments for rent and long-term land use planning to make emerging residential estates as friendly to their residents as possible and ensure they age slowly. But conferences in the “Polish Residential Market” series are not just lectures, presentations and discussion panels – it is also an opportunity to establish business contacts with more than 400 other participants. This will be facilitated by our in-house IT platform “Match Maker” – a special tool that allows you to arrange meetings in advance with all the “PRM” guests during the event.
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