Tens of thousands of new apartments. Poland in the lead

Last year, construction began on nearly 190,000 new premises and over 220,000 were put into use. This places Poland in the top of the countries where the most construction is taking place – our country was in third place in terms of the residential construction intensity index, which determines the number of premises put into use per 1,000 inhabitants, and amounted to 5.86 – according to data presented in the Deloitte report.

Among the countries analysed in the report, this indicator is higher only in Ireland – 6.19 and Israel – 5.88, and the number of apartments put into use in absolute terms in 2023 was higher only in France – over 373 thousand and Germany – 245 thousand

The authors of the publication noted that the general macroeconomic situation in Europe, including the ongoing regular changes from 2022 interest rate hikes and the effects of the energy crisis contributed to a noticeable decline in the number of investments being started.

At the same time, in many cities, supply, i.e. the number of available apartments, is still too low compared to demand, which results in an increase in transaction prices and rents for apartments and houses – it was noted.

According to the report, housing prices in Poland increased by an average of 7.94% year-on-year. For the first time in the history of the study, an average of over 2,000 euros per square meter is paid in our country.

As reported, there are currently 15.8 million apartments in Poland, making us one of the largest European markets. For comparison, the number of apartments and houses in Germany, France and Spain are: 43.6 million, 37.8 million and 26.8 million respectively. The statistics regarding the number of apartments per population are slightly worse. The average housing stock in all the countries studied is 457 apartments per 1,000 people, and Poland is below the average with a result of 420 apartments per 1,000 inhabitants. The highest result can be boasted by Bulgaria – 688, and the lowest Greece – 287.

The number of construction starts decreased throughout Europe, and year-on-year growth in initiated investments was recorded only in 3 of the 22 countries analyzed; Greece, Ireland and Portugal. In Poland, their number dropped by 7.6 percent year-on-year, but in absolute terms, our country with 189 thousand apartments started, once again found itself on the podium behind France and Germany. In turn, taking into account the indicator of the number of apartments built per 1,000 inhabitants, we close the top five with a result of 5.02.

As the authors of the report noted, in 2022, most European markets saw dynamic, often double-digit increases in housing prices. Last year, their pace slowed down somewhat, and corrections were noted in several countries. Poland, where an average of EUR 2,219 (PLN 9,500) per square meter of housing in 2023, was between Italy (EUR 2,118/sq m) and Croatia (EUR 2,246/sq m). The most expensive location among the countries covered by the analysis turned out to be Israel, with an average transaction price of EUR 5,439/sq m. The cheapest, on the other hand, is Bosnia and Herzegovina with an amount of 1,315 euros/sq m.

Compared to 2022, Poles had to pay 12.2 percent more for real estate (taking into account prices in euro), and 7.9 percent more when converted to PLN.

A larger increase (taking into account price changes in local currency) was recorded only in Portugal – 11.5%, Hungary – 10.56% and Norway – 9.05%. In turn, the largest price drops were recorded in Italy (-10.7%), Israel (-4.6%) and Denmark (-3.8%).

Taking into account the wage-price ratio, in Poland a person earning the national average wage must spend the equivalent of PLN 7.9 million on buying a 70-meter apartment. average gross salaries. This indicator has not changed significantly over the past few years, despite the dynamic growth of prices on the market, which is the result of rising wages – the report indicates.

For comparison, buying a new apartment of this size in the Czech Republic requires spending the equivalent of 13.3 average gross annual salaries. Second place in this respect went to last year's leader in this category, Slovakia, with the equivalent of 12.7 average gross annual salaries. Third place ex-aequo was taken by Ireland and Israel, where residents must put aside 10.2 average gross annual salaries. In turn, the most affordable countries to buy a new home compared to average earnings are Norway and Denmark, where citizens need the equivalent of 4.8 and 4.7 gross annual salaries, respectively.

– Traditionally, real estate prices are the highest in capitals and metropolises. Paris stands out in particular, where you have to pay almost 15 thousand euros per square meter. The capital of Poland is not spared from price increases either. Warsaw is one of the cities where significant annual fluctuations in apartment prices were observed. Compared to 2022, they increased here by 12.7%, and a Varsovian must spend the equivalent of 8.9 gross annual salaries to buy a new apartment with an area of ​​70 square meters. Interestingly, of all metropolises, residents of Amsterdam have to spend the most when they want to buy their own place. In their case, it is as much as 15.1 gross annual salaries – emphasizes Dominik Stojek from Deloitte.

According to the report, in 2023 the average interest rate on mortgage loans in Poland was the highest among all surveyed countries and amounted to 8.08%.

– The slowdown in the pace of price growth in many cases results from weakened demand, while the smaller number of transactions is the effect of limited availability of mortgage loans due to high interest rates and additional regulations tightening credit policy introduced by banking supervision authorities in some countries – indicated Stojek. As he added, the lack of possibility of purchasing an apartment contributes to the increase in rental fees, which additionally worsens the availability of apartments and negatively affects the overall quality of life.

Deloitte's report indicated that rents in most cities remained at a comparable level to the previous year. In 2023, the average rental price per square meter was EUR 16.7 in Warsaw, and EUR 13.9 in Gdańsk and Kraków. For comparison, the price in central London was EUR 33.8/sq m (an increase of 27.3% y/y), and the lowest rates were recorded in the Greek Patra – an average of EUR 6.3/sq m.

Deloitte's “Property Index, Overview of European Residential Markets” report is an analysis of real estate prices in 2023, from 24 countries and 69 European cities. It focuses on observing factors that affect the development of this market segment.