In the conditions of constantly rising prices, apartment buyers in Poland, instead of wishful thinking, focus on a realistic approach to looking for a flat. A larger budget with a smaller expected size is the most common change in buyers’ declarations.
After the outbreak of the pandemic and periods of lockdowns, a visible change in consumer preferences was expected in Poland. It was assumed that the expectations of those who would buy flats would be towards larger flats, which would provide a place to work, with a balcony or a garden and access to greenery. This was to come at the expense of changing the preferred location to those located further from the center, on the outskirts of the metropolis. Meanwhile, data from Q4 2021 from Warsaw, Wrocław, Kraków and the Tri-City show that:
The factor with the greatest impact on the behavior of people looking for flats remained the dynamically growing prices (on average in Poland at a rate of approx. 14-15% y / y).
Still the largest group, as many as 39% of buyers, is looking for 2-room apartments. However, it is already almost 8 pp. less than 5 years ago. At the same time, interest in studio flats has been growing steadily since 2020 in all four surveyed markets.
Regardless of the preferences regarding the number of rooms, all buyer groups (investor, single, couple, family) recorded a further decline in expectations regarding the minimum size.
People looking for flats make the budget real. In all cities, in 2021, the maximum declared budget of each of the groups of buyers increased significantly. On average, from 12% in Warsaw to 18% in Kraków.
During the year, the share of people accepting space in the 30-39 sq m range increased from 36% in the fourth quarter of 2020 to as much as 47% in the fourth quarter of 2021. in wanted premises.
Most, i.e. about 60% of singles, couples and families want to support themselves with loans when buying a flat. Among investors, it is only 36%. Purchases for cash mainly concern the smallest areas.
The just published report “Preferences of apartment buyers”, prepared every year by the JLL team on the basis of data from the obido.pl platform, is an interesting freeze-frame – a picture of the housing market in the fourth quarter of last year shown from the perspective of people looking for apartments. There is no doubt that the ongoing war in Ukraine affects not only the demographic and social dimension of life in Poland, but also changes the situation on the housing market. There is already talk of the rapid depletion of housing for rent and the growing disproportion between supply and demand. The influx of a large group of refugees looking for temporary, but often also long-term shelter with us, may contribute to a change in the general picture of preferences of people looking for housing. The data and conclusions presented by JLL will therefore be an important starting point for observing the scale of changes that we are witnessing now.
Home buyers measure their strength on intentions:
According to the report “Preferences of home buyers – 2021”, instead of the expected change in expectations as a result of pandemic experiences, e.g. with remote work and teaching, 2021 saw a strengthening of the trends observed on the Polish housing market over the last few years.
Consumers still most often looked for the traditional “two”, but once again lowered their expectations as to the minimum size. In the Tri-City it was even slightly below 35 sqm, and in Warsaw – 36.5 sqm. People looking for a flat have definitely increased the declared maximum budget for the purchase, adjusting it quite objectively, especially in Kraków and Wrocław, to the realities of the offer prices. On the other hand, in the Tri-City and Warsaw, the assumptions of those looking for a long time do not match the actual costs. This disproportion has been present in these two markets for several quarters. Increasing the declared budget following the increase in prices generally does not happen overnight – visitors to the obido.pl portal need an average of 2 to 4 quarters to adjust.
“Although the demand in the housing market in 2021 was close to the record high, the rapid increase in housing prices in 2021, combined with the increase in interest rates, negatively affect the purchasing power of people looking for a new apartment. As a result, we recorded another decline in the size expectations. Approx. 60% of people declaring their willingness to buy an apartment for their own use want to use a loan. And in the situation of increased costs of this type of financing, the creditworthiness of customers decreases. Hence, it should also be assumed that the actual budget that the buyers ultimately had at their disposal in Q4 last year was lower than the declared one,” comments Anna Karaś, senior consultant in the Housing Market Research Team.
Over the last two years, the declared maximum budget for the purchase of a flat increased in Wrocław by 19%, Warsaw by 24%, and in the Tri-City and Kraków by as much as 30%. And although in Wrocław the pace of this growth remained at the level of 2018-2019, previously it was 15% in Warsaw, and 17% in Kraków (the Tricity market was not examined in the first editions of the report).
“However, it is worth noting that the declared budget differs significantly in individual cities. We observed that the lowest amount was declared by the inhabitants of Wrocław, and the highest by the inhabitants of Warsaw. The disproportions can be as high as 30%. The greater the preferred number of rooms, the greater the variation in the declared maximum price,” said Katarzyna Kuniewicz, Head of Residential Research at obido (OLX Group) points out.
A smaller apartment, or further from the center?
Depending on the city and the group of buyers, we observe other ways of adapting expectations to rising prices. In all the cities studied, the declared demand for studio flats has increased in recent years. At the same time, there was a decrease in demand for three-room flats. However, the scale of changes in the preferred number of rooms is not very large – it concerns several percentage points over several years.
“In the last 2 years, however, we have observed a decrease in the expectations of buyers in terms of apartment space, although this tendency applies to a small extent to 1-room apartments. In the case of 2-room apartments, the change is -1.3 sq m. comparing Q4 2021 to Q4 2020, while for 4-room units it is already a decrease by as much as 7.1 sq m. Still relatively the largest apartments in the case of 2-room apartments and more are sought in Warsaw, and the smallest in the Tri-City,” said Aleksandra Gawrońska, Director of the Housing Market Research Department at JLL.
Both the prices and the pandemic have contributed to the change of preferred locations in groups looking for flats with more rooms. Couples and families today are more likely to move to the outskirts of the city. Before the COVID-19 pandemic, between 24% and 33% of customers were considering living outside the main city in individual buyer groups.
“Due to the fact that we are so close to people looking for an apartment, we could notice a clear change. In Q4 2021, the percentage of buyers willing to choose a peripheral location increased among couples to 41% (+16 pp) and to 48% among families with children (+15 pp). Looking through the prism of individual cities, the greatest increase in interest in suburbs over two years was recorded in Wrocław – by 14 pp. (up to 43%) and in Warsaw by +10 pp. (up to 37%). In the Tri-City, the share of people willing to move away from the city centers was already high, exceeding 40%, so here the change was not that clear. In Krakow, the number of declarations indicating the farthest districts increased by 7 pp,” explains Katarzyna Kuniewicz, Head of Residential Research at obido (OLX Group).
Couples and families most often look for apartments on obido.pl
Since 2017, the largest group of people looking for a flat on the obido platform are couples and families with children, whose share in the potential demand is approx. 63%. The next largest group are singles, whose share, depending on the market and the period under study, ranged from 21% to 25%. The share of investors considering purchase for rent or capital investment was characterized by the greatest volatility over time, and at the end of 2021 it was 15%. Based on data collected from other sources, it can be concluded that the share of investors in concluded transactions has been significantly higher in recent years and reached over 30% in some cities. It seems that a large number of investors use other sources of information when looking for apartments, or, intending to buy more apartments, directly reach the selected developer company.
