PKO BP: House prices are still on an upward trend

House prices will remain on an upward trend in the medium term, with a marked increase in their annual dynamics in the second half of the year. 2023 – indicate the analysts of PKO Bank Polski in the report “Housing Price Monitoring: The rise in house prices is gaining momentum”.

“We expect apartment prices to remain in an upward trend in the medium term, with a marked increase in their annual dynamics in the second half of 2023. The reason for this forecast is mainly a significant drop in supply due to the freezing of many new development investments last year, after the drop in demand observed at the time. On the demand side of the market, we see clear symptoms of recovery,” reads the report of PKO Bank Polski.

Anticipation of interest rate cuts

The increase in apartment sales is due to the end of the cycle of interest rate hikes and the emergence of expectations for interest rate cuts among investors, analysts indicated.

“In the first half of the year, the increase in sales was related to the primary market, which is somewhat in favor of investment buyers. The launch of the loan repayment subsidization program is also likely to boost sales in the secondary market. We see Safe Credit 2% enjoying strong interest in the first weeks of July, which is related to the realization of delayed demand – from the announcement of the program to its implementation, decisions to buy the first apartment were withheld,” we continue reading.

According to preliminary estimates based on PKO BP data, the average transaction price per square meter of an apartment in the primary market in the 6 largest cities increased by 5.1% in Q2 2023. q/q and by 5.9 percent. y/y versus 5% y/y growth in Q1 2023. In the other 10 provincial cities, prices fell by 0.7%. q/q and increased by 1.5%. y/y compared to an increase of 7.8 percent. y/y in Q1 2023

“The average total number of transactions in the primary market in Q2 2023 increased by 3.3% q/q and 6.9% y/y compared to an increase of 11% y/y in Q1 2023. In Q2 2023, of the 6 largest cities, only Poznań recorded a slight decrease in the average transaction price in the primary market compared to the previous quarter,” the report also states.

The average price of m2 in the most expensive market in the group of 6 largest cities in Warsaw is currently PLN 13.8 thousand. PLN, and 8.5 thousand in the cheapest market in Łódź. zloty. Over the past 5 years, the increase in the average price was 75 percent. The highest price dynamics in this period were recorded in the markets of Gdańsk (87 percent), Krakow (82 percent) and Wrocław (81 percent), and the lowest in Poznań (57 percent) and Łódź (60 percent).

Source: Do Rzeczy