CONTINUED REDUCTION IN NEW UNITS COMING ONTO POLAND’S RESIDENTIAL MARKET For the second successive quarter, developers have attempted to establish equilibrium between units sold and new units coming onto the market. Rising inflation continues to drive buyers to developers’ offices, with sales for the first three quarters of 2021 exceeding 2020’s annual total.
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he residential market’s third quarter performance was markedly weaker than the first six months of 2021, both in terms of sales and new supply. Developers operating in the country’s six largest markets (Warsaw, Kraków, Wrocław, the Tri-City, Poznań and Łódź) put 13,800 units on offer, 13% less than the previous quarter. Although sales of 15,000 units were 23% lower quarter-on-quarter, they still exceeded new launches for another consecutive quarter. The offer available in these cities on the primary market dropped to 36,600, a level 26% lower than a year ago, according to the latest JLL report, Residential Market in Poland - Q3 2021. Poland’s inflation rate, which continues to rise on a monthly basis, is driving new buyers to sales offices. While it is clear that the limited offer and rising prices are having an increasingly significant impact on the decline in the number of units sold, developers still sold 54,000 units to individual buyers in the first three quarters of the year, 1,000 more than in all of 2020. “The pandemic is still affecting - although in a slightly different way than last year - the residential market. On the one hand, it is significantly stimulating demand. Buyers are seeking security for their savings through property purchases, but also improved housing conditions for fear of further pandemic restrictions. On the other hand, disruptions in supply chains have increased the cost of building materials, and inefficiencies in public administrations’ 14
Winter 2021
limited supply. In this situation, it is extremely difficult for developers to plan sales and rationalize financial assumptions, and the attempt to mitigate the risks involved manifests itself primarily in launching projects at ever higher prices”, said Aleksandra Gawrońska, Head of Residential Research at JLL. The market which saw the greatest increase in unit prices in investments launched for sale was in Wrocław, rising 23% on the last quarter. As a result, the average price for all units on offer at the end of September in the city exceeded the PLN 10,000/m2 mark for the first time. At the end of September, the price per sqm in Wrocław was 16% higher than the year before. The biggest annual increase in prices was registered in Łódź (18%) with the smallest rise in TriCity (9%). However, it seems that more than the increase in prices, buyers are affected by the limited choice of units. Compared to Q3 2020 data, the number of new properties has decreased across all six largest markets. The offer shrank the most in Wrocław, where only 5,400 units were available for purchase at the end of September 2021, 42% less year-on-year. A large 34% drop was also visible in Warsaw. Given the pace of sales over the last 12 months, the current offering may well have sold out in around five months if new developments had not entered the market. The key questions are if and where a rapid increase in supply is possible. As emphasized by JLL experts, in terms The Warsaw Voice
