Price records on the real estate market in Poland in the third quarter of 2023

The third quarter of 2023 can be called a quarter of records in real estate. Prices in almost all markets have reached record highs. Moreover, the growth rate was even higher than in previous quarters.

The third quarter of 2023 can be called a quarter of records in real estate. Prices in almost all markets have reached record highs. Moreover, the growth rate was even higher than in previous quarters.

Large premises have increased in price the most (14% year/year). Medium-sized apartments are 13% more expensive than last year, and small apartments are 11% more expensive. If we look at all segments together, the largest increases occurred in Sosnowcu (24% y/y), Białymstoku (19% y/y), Gdyni (19% y/y). It was also very hot in the mortgage market. In the past quarter, the highest amount of mortgage loans in history was paid out - just under 25 billion zlotys. However, it is worth remembering that this was a period before interest rates rose, which can dampen sentiment.

In the third quarter of 2023, Poland experienced a real boom in the real estate market. The only segment where the average price has not reached a record level is small apartments (up to 35 m2) in Sosnowcu. For all other apartment sizes, prices were the highest in history. An example is Kraków. The average price of medium-sized apartments (35-60 m2) and large apartments (over 60 m2) there for the first time exceeded PLN 10,000 per m2, and the price of small apartments (up to 35 m2) reached a record level of PLN 12,000 per m2.

The hottest thing was in the segment of large apartments. The average growth, as we have already said, here was 14% y/y, and in several cities prices increased by more than 20%. The record holder is Gdynia, where prices increased by 27%. When buying, for example, a 70-meter apartment, you had to pay 145 thousand zlotys more than a year ago (an increase from 538 thousand zlotys to 683 thousand zlotys). There are also significant increases in Sosnowcu (24% y/y), Białymstoku (23%) and Krakowie (22% y/y). It is also worth noting that housing prices are rising faster and faster. In the previous quarter it was 9% per annum, and now the growth is already 14%.

Let's take a closer look at Warsaw. Here, in the third quarter of 2023, the cost per square meter. meters of small apartments amounted to PLN 13,570, which is 13% more than in the third quarter of 2022. Average-sized apartments have risen in price in the capital by 11% compared to the previous price of PLN 11,800/sq.m. The same increase of 11% was recorded in the cost of large apartments (a year ago they cost 11,402 zł/sq.m.).

In terms of the price of apartments in all 3 categories, the capital, of course, is ahead of all Polish cities. But in terms of growth rates among small apartments, it is inferior to 4 cities; among medium-sized apartments, Warsaw is in 9th place. In the category of large apartments, Warsaw ranks 11th-13th among large cities in terms of growth rates. The relatively low annual real estate price indices are explained by the significant increase in housing costs in previous periods and, accordingly, a large growth base.

Active demand for large apartments can be seen not only in prices, but also in a decrease in the number of available listings. There were 20% fewer unique offers for the sale of large apartments than in the previous quarter. For medium-sized premises the reduction was 15%, and for small premises - 11%.

There are several reasons for the popularity of large apartments. Firstly, in the past they have risen in price more slowly than small and medium-sized premises, so their prices have not yet been too high. This made it easier to achieve great growth. In addition, developers have recently built little such housing. They focused on small apartments, which in previous periods sold like hot cakes. Meanwhile, recently there has been a demand for larger premises, as the good situation on the labor market allows many families to exchange housing for larger ones.

It is surprising that prices for small premises (less than 35 m2) grew the slowest. Their prices increased by 11% y/y, while medium-sized apartments increased by 13% y/y and large apartments by 14% y/y. Usually it was just the opposite, that is, small apartments rose in price the most. It is currently difficult to assess whether this will become a permanent factor or whether the situation will change again.

To complete the picture, we must add that we cannot talk about any kind of collapse in the small apartment segment. The 11% year-on-year growth was nonetheless higher than previous quarters. The largest price increases in this market occurred in Sosnowcu (25% y/y), Białymstoku (16%), Szczecinie (14%) and Gdyni (14% y/y).

The changes brought about by the interest rate increases already introduced are not exciting, but keep in mind that more may appear in the coming months. Therefore, the most likely scenario at the moment seems to be a gradual decline in demand for apartments and the rate of price growth. However, it should be added that interest rates are not the only element influencing the market situation. If interest rates rise only slightly and inflation or wage growth continues to be high, the real estate boom should not end.

Source: Expander and Rentier.io report