27 May 2010, Hotel Kossak in Cracow held the fifth conference organized by the Institute of Real Estate Market Monitor MRN.pl. During the meeting, the experts tried to dispel concerns about the current situation of the real estate market, as well as to forecast development in the coming years. During the conference, residential primary market and secondary market for land, houses, and the market situation in the commercial real estate market has been described in detail and analyzed.
For many months, investors have been trying to predict the actual end of the crisis. Key questions concern the further development of the real estate prices and the possible liberalization of banks policy in terms of granting mortgages. Institute of Real Estate Market Monitor MRN.pl - which includes 60 appraisers, 20 real estate analysts, basing their research on the 130 000 real transactions - is, in a meticulous way, trying to answer these questions.
Report on the primary market prepared by the property appraiser, real estate market analyst Piotr Krochmal, covered the current state of the primary market. The conclusion of the analysis suggest that in 2009 we were still witnessing stabilization. Today more and more companies with attractive (cheap) housing start to gently raise prices, probing the market. Contrary to that, the developers that offer large apartments (expensive) located in a partially sold-out buildings. They are still trying to spice up the offers with discount prices - said Piotr Krochmal. He also highlighted the important role of the government subsidies "Rodzina na swoim", which was of considerable importance to stimulate the market in crisis. According to data provided by the Association of Polish Banks, thanks to a government program, Poles managed to finance and successfully complete several investments at risk. About 20 percent of customers, who took loans in the previous year, benefited from funding it by using subsidies from the Treasury.
An important issue is the increase in the number of flats available in the developers' offers. There are significantly more flats than in the winter as their total number now stands at 6.5 thousand. The number of listings in buildings that are not finished is rising. Most of them are in the very early stages, so one should not expect much interest from customers. The number of units in completed buildings is gradually decreasing. In 2009, there was a decline in housing prices on the developer market. Comparing the level of prices in spring 2010 and autumn 2009, one can see a decrease of 2 percent. It should be noted that developers are continuously observing the market as well as the interest of customers and they operate on the prices, making them level with current demand.
"Wait with shopping until winter" - this is a conclusion summarizing presentation on the situation on the land around Cracow, prepared by appraisers Alicja Malczewska and Gabriela Surowiec. Throughout 2009, we saw declines in average prices of agricultural and green lands in Cracow, Wieliczka and Myślenice. You can see by the fact that the largest and most dynamic drop was recorded in the Wieliczka county, where prices have been at a very high level since 2008. At the end of 2009, the highest price was noted in the district of Cracow. For more than two years in the three counties studied, we saw a steady decline in the number of transactions. In the first quarter of 2010 we also observed this trend. Alicja Malczewska draws attention to one fundamental question concerning reduction (compared to previous years) of the possibility of speculation, which was closely associated with the expected voting on the zoning plan. The severity of speculation in the area of agricultural land will decline. (...) The purchasing ability of individual investors is at a low level, so the greatest demand will be for cheap lands for housing - Alice Malczewska emphasized.
Relatively pessimistic vision was presented at the meeting by appraiser Maciej Grabowski, who combines knowledge of the real estate market and the capital market. The analysis carried out by him concerning the state of the Polish economy, which he made in the macro scale, shows a number of threats. Most of them are the direct result of the current state of the financial sector and the financial situation of the Treasury and local governments. At the same time, it indicates a strong correlation between the evolution of prices in the real estate market with the phases of the business cycle on the stock exchange. Assuming that the situation on the stock market is ąahead ofą changes in other segments of the economy by about 6-7 months, we can expect that the housing market will begin to rise after the crisis until about 2012. This not really optimistic scenario is supported by the expected downturn in the Eastern markets, including economic bubble in China and the rise in the value of money in the country resulting from the collapse of the government stocks in the PIGS countries.
In summary, most of the conclusions reached by the experts during the conference, predicted restraint and caution in the planning of any real estate investment. Although the housing market is experiencing a strong reduction of supply at this time, one can expect a slight twitch in prices and a weak upward trend, as demand growth continues to depend primarily on the situation in the financial sector (the possibility of financing the purchase). A true recovery in the market will be announced at the time when weąll start to record demand from abroad.