Real estate prices throughout Poland stopped rising or even fell slightly in September and October. According to reports by the REAS consulting company and the daily newspaper Gazeta Wyborcza, the four-year trend of price growth has stopped.
That’s a consequence of higher supply on the property market. While demand remains very high (many young couples from the baby-boom generation want to buy a flat), the supply has increased thanks to more property development companies and more investment in the real estate market. Another factor which might have helped put the brakes on real estate prices is higher interest rates.
The rate increases have affected people’s willingness to take out a loan to finance a purchase of a property. Currently many development companies are delaying construction decisions until the market trend becomes apparent. Real estate prices are still very high compared to wages in Poland. While the average Polish citizen earns pre-tax 2,950 zloty a month (1,185 U.S. dollars or 799 euro), an apartment or flat in Warsaw costs 9,370 zloty per square meter, in Krakow 8,000 per square meter and in Wroclaw 7,290. These are the most expensive cities in Poland. In Katowice, the average price per square meter is 4,080 zloty.
The unprecedented rise in apartment prices in recent years was also a consequence of the popularity of the Polish market among foreign real estate investors. For them the prices are still not very high and they may still buy property even if most Poles cannot afford it. But real estate customers may have good news soon. According to experts at BRE Bank, developers will have to cut prices in order to encourage potential buyers and to meet increased competition. The bank predicts that prices should start to grow again in 2010. Building a house on outskirts of a big city has become more and more attractive thanks to the high prices of flats. Higher demand for property in such areas contributed to a rapid growth of prices. Statistics published by the daily newspaper Polska show that since January, land for building sites on city outskirts has become two or even three times more expensive.