It is two weeks since the military aggression of the Russian Federation on the territory of Ukraine, and this has already been reflected in the real estate market, which is a litmus test of what is happening beyond our eastern border. A very large part of the flats disappeared from the rental market at that time, sales slowed down a bit, and the construction industry has to deal with a sudden outflow of workers from Ukraine, a currency and raw material crisis and another increase in interest rates, which of course will directly increase real estate prices. How the real estate market will cope in this difficult time is predicted by Katarzyna Tworska, Managing Director of redNet 24, a company specializing in the sale of development apartments.
“At the moment, 1 million 330 thousand people have come to Poland. refugees from Ukraine, and there will be more of them. Each of them needs a roof over their heads. Poles have opened their hearts, but the possibilities are ending somewhere, so the demand for apartments in a few months will be very high, and rental rates will go up a bit earlier,” notes Katarzyna Tworska
Needed apartments for now:
It is difficult to estimate how many refugees crossing our border treat Poland as a stopover, and how many want to stay longer and work. It is hard to expect that they will be able to afford a flat, even if they start earning money in Poland, collecting their own contribution and achieving the already high creditworthiness may turn out to be extremely difficult. Therefore, it is already known that it is the secondary market that will be of great importance for some time, and that ready-made apartments will disappear from the primary market, which investors and rental companies will decide to buy.
“The prices of both new and used apartments will maintain the current upward trend. At the moment, flats are needed “immediately”. Those on the secondary market will end quickly, so PRS Funds, buying flats from the developer for the so-called institutional lease. In the first place, the purchase will concern ready-made apartments, and in the future, investments that are just under construction. For refugees, this form of renting will be safer, as the private owner may suddenly change his mind and terminate the contract overnight, and the fund will not, but it also increases rates and dictates prices on the market,” emphasizes Katarzyna Tworska
Construction costs are rising and housing prices will rise:
Due to the sanctions imposed on Russia, the local central bank increased the main interest rate at the end of February from 9.5 to 20 percent. this was to protect the ruble. Also our central bank, for the same reasons, decided to raise by 0.75 basis points from the level of 2.75 to 3.50%, which comes into force today. The situation in Ukraine has a direct impact on the prices of building materials and raw materials in Poland. The lack of workers from beyond the eastern border will also significantly increase the construction costs of new investments. In order to equalize them, developers will be forced to raise prices for their properties.
“It is hard to estimate at the moment how big increases can be expected, because the situation is dynamic. Undoubtedly, there is no room for developers to cut prices due to rising costs. The zloty exchange rate and rising interest rates directly affect the creditworthiness of buyers and the monthly repayment of those already incurred. However, it will be possible to say how the market will behave in a few months, now it is too early for any specific diagnosis. Even if the number of applicants for home loans has decreased over the past two weeks, this does not mean a downward trend in the future. People react emotionally, which is understandable, but we are all aware that everyone needs a roof over their heads for their existence and the purchase of real estate is still the best protection of capital,” says Katarzyna Tworska.
