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The cost of living and running a home increased by 21 percent. Commentary by Bartosz Turk

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According to the HREIT analysis, a statistical family spends over PLN 1,350 per month on the maintenance and furnishing of a flat. As we read, “in the last year, all the elements that make up the total cost of maintaining a house have become more expensive.”

Bartosz Turek, chief analyst at HRE IT, pointed out that March brought further increases in the cost of maintaining, running and furnishing a flat. According to HREIT estimates, based on data of the Central Statistical Office shows that a statistical family spends about PLN 1,356 a month on this purpose. During the year, these expenses went up by more than 21 percent, which corresponds to an increase of almost PLN 240.

Estimated home maintenance costsHRE Investment

Lower inflation only means that increases in stores will be less frequent

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Turek pointed out that the only consolation is the fact that after large price increases in recent months, there is hope that the cost of living will grow more slowly. “To a large extent, this is the effect of a high base, i.e. the fact that a year ago we witnessed a sharp increase in prices, which means that comparing today’s rates to those from a year ago, we are dealing with a lower percentage dynamics of changes. But that’s not all” – noted the analyst.

“Some raw materials (oil, gas, wood or copper) are cheaper than a year ago. So if, in line with NBP forecasts, the growth inflation there is a chance that the costs of maintaining, running and furnishing flats will not grow as fast as in recent months. At the same time, hopes for a return to pre-war levels should be abandoned. Lower inflation only means that increases will be less frequent or less dynamic in stores or service points, he added.

He explained that these calculations of the cost of maintaining, running and equipping flats concern a statistical Polish family. In practice, it means that the rent for renting flats is included in the said amount to a very small extent.

“This is because most Poles live in real estate they own. Only 4-5 percent of people are tenants who pay rent on market terms (in the last 12 months it has increased on average by 20-25 percent). In addition, 11-12 percent citizens are tenants using apartments with reduced rents (e.g. municipal, company or TBS)” – we read in the analysis.

Turek emphasized that the figures presented above completely ignore the situation of people who repay housing loans, because the Central Statistical Office omits them in its calculations. “To put it simply, it can be assumed that our calculations show the costs of running and furnishing a house rather than acquiring it. If someone is a tenant or has a loan, their monthly expenses can be even several times higher” – he explained.

Energy market: fall in fuel prices

“The slightly slower increases in housing maintenance costs that have been observed for several months are due to the delicate normalization that is reaching the energy market” – said Bartosz Turek.

He explained that this is mainly due to the fall in fuel prices. At the same time, the term “fuel” is understood by the office in both solid (wood, coal) and liquid (oil) form. Fuel understood in this way is still more expensive than a year ago (according to the Central Statistical Office by almost 1/3), but for several months its prices stopped growing at an alarming rate and began to slowly fall.

House maintenance and runningHRE Investment

According to him, however, this does not change the fact that the list of goods and services that make up the cost of living and running a house is still dominated by those that have increased in price with double-digit dynamics in the last year.

“In addition to fuel, this group also includes heat (more than 40% more expensive than a year ago), electricity (an increase of 22% y/y), as well as cleaning agents, home services, rent, gas and home appliances Unfortunately, in the data of the Central Statistical Office, it is in vain to look for a category consisting of the cost of living and running a house, which would show that something has become cheaper in the last year” – he said.

Read also: They live in containers, cars, microapartments. “The real estate market has become a nightmare”

Main photo source: Shutterstock

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