Over a five-year period, property prices have risen the most in Hungary (80 percent) whereas Poland’s figure over that period is a more modest 37 percent, but Poland’s figure is rapidly rising, according to Eurostat.
Jarosław Sadowski, an analyst for “Expander”, highlights that the rise during the pandemic has been in properties already built (10.6 percent) rather than those being constructed (4.2 percent).
The high figure for 2020 as a whole is also accounted for by a steep rise in prices in January and February 2020 and by lowering of interest rates leading to the cheapest mortgages in Poland’s history.
Lower mortgage repayment rates encourage investment in the property market by those with capital to spare. It is interesting to note that in EU states where interest rates did not fall, there was not an equivalent rise in property prices.
According to Expander and Rentier, property prices rose in 14 out of 15 Polish cities researched during 2020. The pandemic only slowed down this trend.
In 2019, the property price rise averaged 11 percent, for 2020 it is forecast to be 6 percent.
Bartosz Turek, chief analyst for HRE Investments, observes that Poles have not stopped purchasing property during the pandemic. Those banks which limited their mortgage lending now regret their move.
“Developers are having to move faster in starting their construction as client demand forces their hand. The reduction in interest rates and the government’s support for employment have facilitated this process. The rate of return on savings in banks has fallen 20-30 fold when compared with the profitability of renting property and mortgage rates are a bargain,” concludes Turek.
