The future of the real estate market. A bubble that will never burst. Economic Forum 2022

Tight monetary policy, exorbitant recommendations of the supervisor regarding the assessment of creditworthiness, a sharp decline in interest in mortgages, a sharp discouragement of new investments in the housing market due to rising prices – a combination of these factors gives the Poles a headache.

So the question arises: What will happen next with house prices rising despite the rapidly approaching crisis? This was discussed by the participants in a panel discussion “The future of the real estate market .. A bubble that will never burst?” During the economic forum in Karpacz.

The discussion participants and the principal did not agree with each other about future property prices. Male d. Adam Czernyak of the Warsaw School of Economics in the introduction to the interview that Prices will go down. In what dimension? According to him, the correction in nominal prices will amount to 5%, but in real terms (taking into account inflation) housing prices will fall by 20%.This, the broker pointed out, meets the official definition of a bursting bubble in the housing market. How did the experts invited to the discussion react?

– It seems to me that this is the end of the real estate bubble, but in the sense of it In the next 14-16 months we will deal with correcting or stopping another increase in property prices The situation was assessed by Jakub Bianowski, head of the National Real Estate Resources Authority (KZN), a government agency whose primary goal is to meet the housing needs of Poles. At the same time, he stressed that anticipating the future under the current circumstances is very difficult.

The head of KZN justified his cautious stance on hard-to-obtain housing loans and the decrease in the number of new construction investments in the housing market, which will lead to a shrinking of the supply to the client. He added that the apartments to be completed this year and next year sold out at 80 and 60 percent, respectively. In his opinion This would calm the real estate market and thus stop price hikes for the next 1.5 – 2 years. However, the question of what to do next is left open.

Wojciech Caruk, President of PFR Nieruchomości, which manages the Housing Sector Fund for Rent and the Housing Sector Fund for Development, got into the controversy with the previous speaker. – A bubble is a sudden and sudden process with excessive increases in real estate prices. We don’t have anything like that in Poland. In order to finish or break something, it must first begin – reply a manager with more than twenty years of experience managing construction projects.

Two other participants in the discussion agreed with him: Bogusław Półtorak, professor at the University of Economics in Wrocław, and Jacek Ratajczak, President of Zonifero, creator of the office space management application.

And explored moderate committee, d. Chernyak, the topic of future housing prices. Chief Executive Officer Karouk said that the main role in this market is played by the black swan, which are highly unlikely events that have a significant impact on reality. – From decade to decade there are more and more of them. In ten years there will be more of them yet – the expert chose.

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The team leader noted that the impediment to price forecasting is the lack of data. According to Dr. Cherniak, it should be easy to access, like the inflation data we know on the first day after a particular month is closed. In the case of real estate, the information on prices is very late and it is also quarterly rather than monthly. He adds that economic indicators can help. How do the experts invited to the discussion explain this?

– There was no bubble bursting in Poland, because fortunately circumstances happened that solved this problem. Last year, 250,000 square meters were built in Poland. Apartments. Back in January, we thought there was going to be a sell-off, but it didn’t, even though the sentiment indicator we’ve been working on at the university turned negative for the first time in the last quarter. There was a split in the market, which saved us from bursting the bubble. The rental market suddenly came to life. We have a 30-40% increase in rent and for the first time in a long time 40 million PESELs. This will reduce the oversupply of apartments – Bogusław Półtorak argued.

He added that Poland was the country that saw the least price increases – single-digit prices were converted to euros.

– At the moment, the average price in Poland is less than 7000. PLN per square meter for an apartment. Even if it drops to 5000 PLN, I will say it directly: many people will not be able to afford it anyway. It’s not a question of price, but the availability of funding, said the EU representative.

Dr. Chernyak drew the speakers’ attention to the fact that in the January-July period of this year the number of construction sites decreased by a fifth. His analysis shows that the declines concern the 20 largest cities in the country. In small cities of limited status, it is quite the opposite – the number of investments started is three times higher than in 2017. The bubble may burst in these local markets. What do the experts say?

– There is no chance that the developer will give up his marginEspecially it’s spread over many years – it was spread over 4 years, now it’s 6. From this point of view, there is no room for lower housing prices – said PFR President Nieruchomości.

But he added that the situation is dynamic, but the market is not immune. According to him, with this inflation, real prices will fall. Medium-sized apartments, 60-70 square meters, will suffer the most.

Moreover, she referred to the data that showed that Over the past 15 years, real estate prices in Poland have increased 2.5 times. This is a consistent trend and sees no possibility that apartments will suddenly become cheaper. He explained this by the fact that societies are getting richer, and with it the value of housing, which is a finite good, increases.

Jakob Pianowski, in turn, believes that we are still dealing with housing hunger in Poland. In his opinion An additional 3 million apartments could be built, and there would be people willing to buy them anyway.

Bogusław Półtorak has a similar view. He said the problem was supply, not demand. appreciate it Under normal circumstances, there should be up to 200,000 apartments per year.

– In 5 years, when the investments that started today are completed, the apartments will be purchased by the current 20-year-olds. When we ask them in the research whether they want to live in rented apartments for the long term, the answer is “no” – the EU professor emphasized.

Dr. Chernyak supplemented his predecessor’s statement with the information that Only 3 per cent of Poles want to live in a rented apartment.

Carolina Wisota, Money Journalist