The residential sales market in the 17 largest cities (provincial cities and Gdynia) increased by an average of 20% y/y (combined primary and secondary market) in Q1 2024, compared to an average increase of 14% y/y a quarter earlier, according to a report by the Polish Economic Institute (PIE).
‘Residential sales price growth accelerated again in the last quarter. Among the 17 largest cities, prices rose by 21% y/y in the secondary market in Q1 2024. New listings from developers in this period were 16% more expensive than a year ago. This is higher than in Q3 and Q4 2023, when these increases averaged around 14% and 10%. The increase in house prices observed in Q1 2024 was higher than the nominal increase in wages, which stood at 12.5% at the time, according to the report ‘Housing market analysis – Q1 2024’.
In the two most expensive cities – Kraków and Warsaw – prices on the secondary market increased by 34% and 27% respectively. In Warsaw, it was necessary to pay PLN 17,000 for 1 m2 of a flat on the primary market, while on the secondary market – PLN 18,200. In Krakow, prices in both markets exceeded the value of PLN 16 thousand per 1 m2, the Institute reported.
The supply of new residential sales offers maintains a strong upward trend. In the 17 largest cities in Q1 2024, the number of new offers increased by 20%. In the first three months of this year, an average of more than 9,000 new sales offers per week were received in the analysed group of cities combined in both markets (the average in the previous quarter was 7,500). This is the highest result since at least mid-2022. This is mainly the result of increased activity from developers. Throughout the quarter, the number of sales offers in the primary market increased by 53% year-on-year. By comparison, in the secondary market, the increase was much lower at 8.9%. There are many indications that high prices are encouraging developers to add more projects to their sales offers, PIE reported.
PIE also points out that demand to buy a home is still at a high level, despite the observed decline in mortgage applications.
At the beginning of 2024, the acceptance of applications under the “2% Secure Credit” scheme was stopped, resulting in a 38% decrease in the number of mortgage applications submitted throughout Q1 compared to the last quarter of 2023. However, on an annualised basis, the number of loans granted is still high. It was 186% higher compared to Q1 2023. This was a deferred effect of the ‘2% Safe Credit’ scheme, which expired in December 2023 – loans granted between January and March 2024 were largely in response to applications made in December 2023. In March, 22% more loans were granted under the programme, it further reported.
Source: PIE and ISBnews
