Sales of apartments in Warsaw are currently at the level recorded at the worst time of the pandemic, i.e. in the second quarter of 2020. Two years ago, 2,311 units were sold, in the same period this year only 511 more – according to data from CBRE and REDNET Property Group. Developers are starting to rebuild their offering, returning to pre-COVID-19 levels. The asking prices go up a bit, while the units launched for sale are a bit cheaper. Institutional investors are the target of developers.
“Rising interest rates and the related declining creditworthiness are clearly visible in the number of units sold. In previous years, an average of approx. 5.4 thousand units were sold in the quarter. apartments. In the second quarter of this year, we did not break even 3,000. and we are close to the minimum recorded in the weakest three months of the pandemic. Importantly, the price of flats put up for sale has stopped growing, which is related to a certain stabilization of construction costs and the awareness of fewer possibilities of buyers. However, the average asking price continues to rise, which is due to the fact that smaller and successful premises are being introduced to the offer,” says Marcin Jański, head of the alternative investments department at CBRE.
Demand down, asking prices still slightly up
Braking in the housing market is in full swing. Data from CBRE and REDNET Property Group show that in the second quarter of this year. 2,822 flats were sold in Warsaw. This is the lowest result since the corresponding period of 2020, when we felt the effects of the pandemic the most – then only 2,311 premises found owners. We also drove far away from the quarterly average for the last 5 years, which was 5.4 thousand. flats sold, and therefore by 2.5 thousand. more than at present.
In the pandemic, uncertainty decided to withhold purchasing decisions, now these are rising interest rates and cooling the economic situation. In addition, the price availability of real estate is constantly decreasing, although some stabilization is visible. In the second quarter of 2022, the asking price of flats in Warsaw was PLN 13,612 per sq m. and was 1.9 percent. higher compared to the previous quarter. On the other hand, the price of flats launched for sale is in a downward trend – here the amount is PLN 13,695 per sqm, while in the previous quarter it was PLN 13,988 per sqm. In the case of the prices of flats sold, the price in the second quarter of this year. is an average of PLN 12,805 per sqm, or 1.2 percent. more compared to the previous quarter.
Developers’ offer is rebuilding itself
Developers are rebuilding their portfolio. After the housing boom in 2021, when the offer included an average of 11.6 thousand. premises, time to make up for the losses. At the beginning of this year, there were 13 thousand. flats, and currently it is over 15.5 thousand. This result is similar to that in 2020, when the offer amounted to an average of 15 thousand. apartments. In 2019, it was 17 thousand. premises.
“Developers who have a lot of apartments for sale would be happy to replace the decreasing individual demand with cooperation with institutional investors. The development of the PRS market seems inevitable, but this is not the only element that will develop lease. Some people will decide to rent an apartment due to the lack of creditworthiness, others will continue to rent due to flexibility, and in addition, the demand is constantly influenced by refugees from Ukraine,” sums up Marcin Jański, head of the alternative investments department at CBRE.
