The number of house starts in the poviats surrounding large cities increased by 11.5% in 2018-2020, and the number of house starts in the cities themselves decreased by 21.2%. At the same time, the share of housing purchases in poviats surrounding large cities in the largest agglomerations increased to 33% from 26% over the years 2016-2020, and the pandemic did not significantly accelerate this trend, according to the sector analysis of PKO Bank Polski’s “Real Estate Pulse”.
Supply follows demand. Following the changing preferences of buyers, we observe a clear increase in the activity of housing construction in poviats surrounding cities in the largest agglomerations. According to the Central Statistical Office (GUS), the number of flats delivered for use in poviats adjacent to large cities has grown significantly faster than in the last 2 years. in the cities themselves.
According to PKO BP experts, among the natural consequences of the development of remote work, as well as remote learning, there is a need to increase the size of the apartment due to the need to find additional space, e.g. for an office. This need can be met by buying a larger flat, a flat with more rooms or a house, which in many cases would involve the previously discussed move outside the city.
However, the trend of an increase in the number of rooms in the most popular medium-sized apartments (40-60 sqm) has been observed for years and the pandemic year 2020 did not bring a significant breakthrough in this statistics. In recent years, there has also been a growing preference for larger housing areas, supported by the upward trend in the income of the population.
One of the reasons for the growing interest in houses may be a significant increase in the quality of the housing stock in recent years. A significant improvement in quality may be demonstrated by the change of heating sources in modern single-family housing. Only 13% of the offer of houses built after 2010 has non-ecological and uncomfortable solid fuel boilers , while in the entire offer this type of heating source is present in 28% of houses. The increase in the quality of the stock of houses is, among others, a consequence of changes in the construction law, which increase the standards of energy efficiency of buildings.
Moreover, comparing the structure of loan applications in the PKO Bank Polski Group with the structure of the offer on the secondary market from advertising portals according to the year of construction, it can be concluded that the offer of new homes is insufficient in relation to the demand. This conclusion explains the growing activity in the home construction sector and could herald an increase in new home market transactions in the coming years.
Summing up our analysis, it is worth noting that the development of remote work is not a key factor behind the growing demand in the home market, but only a trend-enhancing factor. In our opinion, a much more important driver for this market has been the significant improvement in the quality of the resource in recent years. When thinking about changes in preferences in the long term, it is worth mentioning several important socio-economic trends, in addition to remote work, which may shape the buyers’ choices on the residential real estate market in the future, such as, for example, demographic changes, technology development or improvement of air quality.
The following cities were included in the study: Warsaw, Kraków, Łódź, Wrocław, Poznań, Gdańsk with Gdynia and Szczecin.
Source: PKO BP and ISBnews
