14 June 2024

Real estate market – forecasts for 2023

Many of us wonder what the real estate market will look like in the new year. Can we expect price reductions or maybe they will go up. We decided to ask this question to the owner of Nowak Estate, Tomasz Nowak, who has been dealing with real estate with great passion for many years. “ Many clients ask me a question about the real estate market in 2023. They are interested in whether prices will increase or decrease? As usual, the situation is complex and depends on many factors. In 2022, for the first time in almost 10 years, prices stopped and even slight declines were observed. This was due to reduced demand. Why this situation after many years of boom? The main reason is a more expensive mortgage loan due to a significant increase in interest rates. For this reason, the creditworthiness of buyers has decreased by approximately 50%. The rampant inflation in Poland is the second factor reducing the number of people willing to buy apartments. The increase in living costs and high prices of electricity and gas effectively reduce household budgets. The war in Ukraine also contributes to increased uncertainty and deterred purchasing decisions. Theoretically, this creates a better situation for those remaining buyers in the market.

But will their situation get better? Probably not.

Because, on the other hand, we have reduced supply on the primary market in 2023. Many developers have suspended their investment projects and are rather selling what they started building in 2021. This means that the number of apartments for sale is decreasing. The prices of construction materials are high and It is not likely that they will drop significantly. And it is them, together with labor costs, that fundamentally influence the final sales prices of apartments by developers. The number of offers on the secondary market is also decreasing. Some owners, without a clear need to sell, prefer to keep the property rather than put their money in the bank, exposing it to a decline in value. It is also worth mentioning many Citizens of Ukraine, who are a new group demand. Additionally, a significant increase in rental costs in 2022 may encourage some tenants to buy an apartment. To sum up, I would not expect price reductions. There may be some price bargains, but in most market segments prices will remain stable or increase slightly. Therefore, I recommend staying calm and carefully making both sales and purchase decisions.

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