- Feb. 14, 2014
-- • After five years of continuous erosion, real estate prices in Poland showed first signs of stabilization and recovery in Q2 and Q3 of 2013. Falling supply of new homes and interest rates on record lows provided price support. The construction sector still lagged behind in 2013 as the number of new building permits and building starts recorded a multi-year low of 139k and 127k units respectively. The persisting weakness in construction sector could be explained with various factors including: still low affordability of real estate due to high unemployment and the overall economic uncertainty, which discourages developers from new investments. Considering the time shift between new building permits/starts and completions, it could be expected that a shortage of new flats and houses will develop in two to three years perspective. As a consequence, prices of quality real estate are likely to trend higher through 2016.
• The expected recovery in the Polish economy in 2014-2016 is likely to benefit both residential construction industry and the mortgage lending sector as the purchasing power of individuals will increase. Stable real estate prices, low interest rates and a new government-sponsored program “Mieszkanie dla Młodych” are likely to boost new lending despite regulatory tightening taking place. Inteliace Research expect that the total outstanding value of mortgage loans at banks will increase 8% p.a. on average through 2016.