RESI sector - Summary of 2023

Housing market

The housing market experienced a dynamic recovery in 2023. The increased demand was mainly due to the “2% Safe Mortgage” programme, which was launched in July and activated the pent-up demand from the previous year. However, the programme has been widely blamed for significantly reducing the available offer and raising housing prices in Poland. More than 100,000 applications were submitted under the programme in the last six months of 2023, which naturally affected housing prices. In terms of the primary market, the national average rise amounted to 13%. What is more, in large metropolitan areas, the year-on-year increase in relation to said market reached (and sometimes even exceeded) 20%.

Although developers have been making every effort to keep up with demand, the investment process is lengthy and the acquisition of new land is becoming increasingly difficult due to the decreasing supply of attractive sites (especially in the largest metropolitan areas). Despite these trends, 2023 was the fourth record year in a row when it comes to housing completions, with more than 220,000 flats commissioned. As the housing boom affects land prices, even sites generally considered unappealing are beginning to attract interest from investors. The sale prices of land in Warsaw start at PLN 2,000 per one square metre of usable floor area that is suitable for development, with the most attractive sites currently priced at several thousand.

In 2024, there will be further increases in housing prices due to the shrinking offers from developers, the persistent high demand (which will be stimulated by rising wages) as well as the homeownership assistance programmes announced by the new government.

Private Rented Sector (PRS)

The PRS continues to be highly attractive for investors – recently, more than a dozen new projects were introduced to the market. However, 2023 ended with only a handful of transactions completed within this sector. This situation resulted from two main factors – investors still had to face a high cost of capital, while the very good level of sales to individual clients did not encourage residential developers to significantly expand their operations in this market. The prospects for the PRS are rather positive, with institutional investors currently being held back mainly by the high cost of debt.

Hotel market

Meanwhile, the hotel market experienced a spike in activity in H2 2023, as Ghelamco sold the hotel segment of The Warsaw HUB to the Corum fund – the transaction, worth more than PLN 300 m, was completed in October. Even though this acquisition does not represent the market’s complete revival, the conclusion of such a deal confirms the investors’ renewed interest in this sector, reinforced by the very good operating results achieved by hotels. According to our estimates, 2024 will end with several more significant hotel-related transactions.

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RESI sector - Summary of 2023

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