Residential market to become casino?

This was helped by the state ‘Apartments for the Young’ programme. This year might not be as eventful and the prospects for 2016 and 2017 do not seem to be very encouraging. The sales of new apartments were as much as 20 pct higher compared to 2007 and 2013, which had been considered to be the best years in this respect. “Good results are an effect of the stabilisation of the market: adjusting the offer to clients’ purchasing possibilities, more rational policies from the banks, as well as the state support under the ‘Apartment for the Young’ programme,” comments Kazimierz Kirejczyk, the president of Reas. “Contrary to the opinion of some analysts’, the programme has played a very significant role in sales stimulation, not only thanks to the possibility of buyers using the subsidies, but also because of its influence on shaping the prices of the apartments offered, which were to a large extent adjusted to the programme’s limits, thanks to which they became much more attractive – also for buyers who did not use the subsidies. It should be expected that the limits of the programme will have an equally significant influence on pricing in subsequent years,” predicted the president of Reas. According to Mr Kirejczyk, the 2014 results will be difficult to match in the near future because they were also influenced by two additional factors impacting sales in the first quarter and the final quarter: in Q1 purchases were made by buyers who had been waiting for the implementation of the ‘Apartments for the Young’ programme and a change in mortgage policy that made it impossible for buyers to incur a mortgage with an own contribution of less than 10 pct of the price of the apartment after the end of 2014.

One of the most important factors that could have an influence on the situation on the development market in the next few years could turn out to be the act on the protection of the rights of buyers, primarily the liquidation of open trust funds. “It is not clear whether and how long the vacatio legis period will be for new solutions. Before the act comes into force, some developers might start new projects on the current basis. Thus the offer would grow irrationally fast again and, provided the demand started weakening at the same time, there would be downward pressure on prices. At the same time, there are some voices warning buyers against an increase in prices, which is, in the long run, related to higher costs of trust funds, the further consolidation of the market, and a decrease in supply. Due to such legislation, the current stable market could turn, once again, into a casino, in which psychological factors determine the result of the game,” warns Kazimierz Kirejczyk.