14.1 C
Thursday, May 30, 2024

Property prices in 2023. Warsaw, Krakow, Wroclaw, Poznan, Lodz, Katowice – forecasts

Must read

- Advertisement -

Real estate prices are stabilizing in the largest markets. However, the next few quarters may be difficult, especially if borrowers wait for inflation to drop and interest rate hikes to end, experts from Otodom and mBank said.

By 14.3 percent. the price of flats in Warsaw increased last year, by 12 percent. in Katowice and by 11 percent. in Poznań – experts from Otodom and mBank reported in a joint report. They pointed out that among the largest cities, rates per square meter increased the least in Krakow – by 5 percent, and the only city included in the price per sq m. lower than 10 thousand PLN was Lodz.

Real estate market in 2023

In their opinion, flats became more expensive “by momentum” in the first half of 2022, but then falling demand slowed down growth, which led to price stabilization. In high conditions inflation and rising wages, this means that in real terms, flats have become cheaper, experts said. However, they added that “unless something spectacular happens”, real estate prices are unlikely to fall in nominal terms.

- Advertisement -

They pointed out that the market indicator showing the relationship between supply and demand indicates a continuation of price stabilization in the largest markets. – In Kraków, Warsaw and Wrocław, the sale period at the end of the year is 13-14 months, and in Poznań and the Tri-City – 16-17. These are values ​​within the so-called market equilibrium, said Marcin Krasoń, an expert on the housing market from Otodom Analytics.

A similar impact on prices – according to the report – may have a return to equilibrium on the construction market. It was pointed out that the prices of building materials have stopped growing, but it may be difficult to achieve spectacular drops, because “the rising costs of energy and transport affect most of the elements needed to build a flat”.

Interest rates and the credit market

Experts also pointed out that the dynamic increase in interest rates caused a collapse on the credit market, where declines in autumn 2022, depending on the month, amounted to as much as 70% y/y. In their opinion, the next few quarters may also be difficult.

– Especially if potential borrowers will wait for inflation to fall and finally end interest rate increases. For the time being, the NBP communicates that it is only a pause. One should also take into account the greater uncertainty regarding the situation on the labor market and the expectation of Safe Credit 2 from the government, said mBank’s chief economist Dr. Marcin Mazurek.

According to research conducted on real estate portals Obido and Otodom, a large number of people have not given up buying a flat. One group of potential buyers – in the opinion of experts – are people waiting for their creditworthiness to return, while the other group is those who have the ability or cash and hope to calm down the situation. Referring to data of the Central Statistical Office it was indicated that developers are still applying for building permits, and those whose financing will allow it will launch investments as soon as the first symptoms of recovery appear.

– Of course, there is room for a relatively quick mitigation of the effects of the tightened lending policy. For this to happen, the KNF needs a flexible approach to the use of a 5 percent buffer when calculating creditworthiness, for example in the case of loans with a periodically fixed interest rate or people with higher own contribution Krason said.

In the opinion of Dr. Mazurek, the prospect of maintaining higher inflation will mean that interest rates will not be lowered in 2023, and in subsequent years, unless something unexpected happens, they will not return to either zero or 1.5 percent.

Read more: There is a shortage of flats, drastic increases in rents. Developers in a difficult market situation

Main photo source: Shutterstock

Source link

More articles

- Advertisement -

Latest article