After a temporary slump in Q2 and a recovery in Q3, despite the existence of varying degrees of restrictions resulting from the COVID-19 pandemic, high activity in the housing market was observed in Q4, the National Bank reported Polski (NBP) in “Information on home prices and the situation on the residential and commercial real estate market in Poland in the fourth quarter of 2020” In the fourth quarter of 2020, a historically high number of completed dwellings was recorded in Poland.
The pandemic also accelerated the changes taking place in the office market, which resulted in the observed increase in the vacancy rate and a decrease in demand for office space, and restrictions in commercial and corporate activities due to the pandemic will affect rents and real estate sales transactions and will be felt in the longer term , the central bank said.
The retail sector in Q4 2020 was significantly affected by the effects of the COVID-19 pandemic. A large part of retail chains are renegotiating lease agreements in shopping centers. Still many large and well-known chains are resigning from premises in shopping malls, moving their stores to the Internet or stores located in at high streets or completely leaving the Polish market. At the end of Q4 2020, the stock of modern retail space amounted to over 12.2 million sqm, which translates into a saturation of 318 sqm / 1,000 inhabitants. This low increase in new space may mean that investors consider the market to be saturated. This is also confirmed by the emergence of projects transforming existing shopping centers into shopping-service-entertainment centers, it is therefore to keep existing customers, and to a lesser extent to compete with new projects.
The central bank emphasized that the impact of the pandemic on the housing market, including prices, is complex as individual segments of local markets behave differently, and the estimated return on equity of housing developers on investment projects remained at the previous quarter’s level of approx. 21%.
In the third quarter of this year, activity on the housing market returned, following the restrictions resulting from the COVID-19 pandemic in force since March 2020. The number of housing construction contracts sold in the largest primary markets was higher by half compared to the historically low level of the previous quarter. housing construction increased slightly, but the pace of growth was much lower, while land prices continued to rise significantly. There was a slight increase in average transaction prices of apartments in the primary market of the analyzed cities and their stagnation or decline in the secondary market.
The NBP reported that in the fourth quarter of 2020, the value of disbursements of new housing loans, after the collapse in the second quarter of 2020 related to the COVID-19 pandemic, was higher than the disbursements of loans in the same period of 2019.
Source: ISBnews
