Regions are becoming more expensive than Warsaw. Apartment prices are going up again

After a period of relative stabilization, apartment prices on the secondary market in the largest Polish cities started to grow again – in March, average asking rates were 0.5% higher. on a monthly basis and by 3.6 percent on an annual basis – according to the report of the Morizon-Gratka Group.

The authors of the publication pointed out that, compared year to year, price changes in several cities exceed the level of a typical correction, and the increases reach PLN 500 per square meter.

“We observe the greatest price dynamics in regional cities. This is particularly visible in Olsztyn, Bydgoszcz, Gdańsk and Poznań, where average offer rates have increased by 5-6 percent over the last 12 months. In the absence of signals of a significant increase in demand, these changes should be explained by the growing inflow of sales offers for apartments in modern construction, of a higher standard and with higher prices to the secondary market, the report states.

In turn, in Warsaw, Wrocław and Białystok annual price increases do not exceed 2 percentwhich, according to experts, means relatively minor changes in nominal terms, i.e. an increase in the average price per square meter below PLN 200.

“In the capital, the average offer price reached PLN 17,492 per square meter in March, which means a year-on-year increase of only 0.7 percent. The situation is even more stable in Łódź, which recorded a symbolic decline in the average compared to last year – by 0.1 percent. In Kraków, Katowice, Lublin and Szczecin, the level of average price increases is close to inflation, which indicates a balanced structure of supply of offers, as well as a relative balance between demand and supply,” noted the report's authors.

Offer prices are rising, but so are customers' negotiating skills

However, as they noted, increases in offer prices observed in advertisements do not always translate into increases in transaction prices, because it is common practice for customers to enter into price negotiations with sellers.

“As a result, the final purchase prices are usually lower than the initial prices by several, and sometimes even by a dozen or so percent. This means that the discounts granted in many cases equal, and sometimes even exceed, the increases in the starting rates,” the publication points out.

The secondary market is shrinking

The report also shows that the supply of new second-hand apartment offers has slowed down in recent weeks, which, combined with the growing demands of buyers, may be a factor limiting the number of transactions concluded on the secondary market and leading to further stratification of apartment prices. In the case of older premises, of a lower standard and in worse locations, for which it is more difficult to find customers today, further price reductions will be necessary, while apartments in new buildings, modernly finished and equipped, with amenities such as an underground garage and in sought-after sizes, will slowly become more expensive.

“It is difficult to predict whether the observed upward trend will continue in the coming months, how it will develop on the secondary market and on the primary market, and how its individual segments will behave, i.e. low-, mid-range and high-end apartments. It is easy to see that qualitative factors are becoming more and more important for searchers today – the standard of the building and finishing of the premises, location, adaptation of the apartment to individual needs. They will largely determine further price changes on the market,” the experts concluded. (PAP)

gkc/mmu/