Polish property market breaks records in 2016
In some regards the Polish property market broke records in 2016, and in other regards it was a very normal year.
With one of the lowest interest rates in history, a well performing economy, decreasing unemployment and increasing wages lead to a good performance (compared to recent years) of the Polish residential property market in 2016.
The best performing sector was the primary market. Newly built projects were in great demand (greater than the secondary market) primarily because of the government program supporting young people buying their first property. The money dedicated for this program for the whole of 2016 was already allocated by July.
The stats for 2016 up to November shows that 2016 was a record breaking year for the Polish property market in terms of the supply and sales.
Developers build 143,000 flats, which is a 10.2% increase on yearly basis, while the number of building permissions increased by 10.9% year-on-year. The data for whole 2016 are expected to be even better as at the end of the year traditionally lots of transactions are closed and also due to the changes in mortgages coming into force in 2017.
The majority of the newly built developments were sold out, and we estimate prices increased in new developments by 4-5% for the year.
Yet at the same time the prices on secondary market remained flat. There was reasonably strong demand but this was matched by the supply.
In October 0216, the average asking prices (PLN/sqm) in the main Polish cities were:
|City||Primary market||Secondary market|
We do not expect the prices will significantly change in 2017. There are positive economic factors that will continue to support demand, but at the same time mortgage banks are expected to make their terms more stringent (primarily higher deposits required) with the potential for higher rates later in the year.
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