The average annual growth rate of housing prices will be 5% y/y this year, 5.8% in 2024 and 7.3% in 2025, Credit Agricole Bank Poland analysts forecast.
In the horizon of about two years, we will see a significant mismatch between demand and supply in the housing market. Demand will be supported by the economic recovery we expect (including a good labor market), interest rate cuts and the 2% Safe Credit program. In an environment of weakened inflows of new units to the primary market, this will be a factor supporting a renewed increase in housing prices, according the the Macromap report.
The bank expects housing prices in the primary market for Poland’s 7 largest cities to start rising again in H2 this year, and this growth will accelerate in 2024 and H1 2025.
Some deceleration of price growth can be expected only in mid-2025. At that time, apartments whose construction began in H2 2023 will be put on the market. According to CSO data, the number of construction starts – after months of y/y declines – increased by 9.6% y/y in July this year, and in August increased by 108.8% y/y. In summary, we forecast that the average annual growth rate of housing prices will be 5% y/y this year. 5.8% in 2024 and 7.3% in 2025, the report further expresse4s.
The analysts noted that the annual dynamics of construction material prices has been on a downward trend for about a year and in August this year formed below zero. The deceleration of material price growth will be a limiting factor for property price growth in the coming months. However, the scale of this impact is small. According to the results of econometric modeling, a 10% drop in material prices interacts to reduce housing prices by about 3%, it also indicated.
Source: Credit Agricole and ISBnews
