POLAND Land prices still holding up and set to rebound

According to Colliers’ research, in Q2 only those transactions that had been initiated earlier and had to be closed due to existing commitments were completed. Investors that had they had the opportunity to do so were able to postpone the final agreements, usually to Q3 or Q4 2020.

The pandemic seems far from being over. We are, however, observing a large recovery in the market, following the ‘defrosting’ of the economy. What’s worth noting is the persistence of high land prices, which did not fall even during the peak of the pandemic. Contrary to some forecasts, the reduced demand for apartments and offices, as well as the announcement of a reduction in their supply by developers, did not translate into price reductions. It is also worth mentioning the particularly good situation of the warehouse market, which, due to the surge in the growth of e-commerce during the pandemic, recorded even greater than usual demand for land for new projects.
Emil Domeracki of Colliers International

Speculative land purchases, driven by soaring land prices in recent years, have been curbed by the current situation, as investors take a more cautious approach and carefully analyse the relevant market data.

However, we are still observing a great appetite for land purchases, as this kind of property remain stable and in uncertain times is a safe haven for capital.
What happens in the coming months or even weeks will be crucial for the land market. Some investors have been putting off their decision-making processes and waiting for further developments. At this point in time, it’s still difficult to predict how the economy will cope when the government's anti-crisis shield runs out. It’s still too early to estimate the economic consequences of the pandemic. Much depends on its further course and a potential intensification in the autumn, as well as on whether there will be another lockdown. However, it is worth remembering that the market in Poland is mature, the demand for land has not decreased and investors have capital to invest. The problem may arise only in the case of transactions that require loan financing. Banks have tightened their policies and are much less willing to lend, thus slowing down some investment processes.
Should the recession deepen, this year will still be a moderately successful one. We will, however, no longer see such spectacular transactions as those we’ve become accustomed to in recent years. And yet, unless there’s a second wave of Covid-19, in Q3 and Q4 we expect a strong rebound in the land market and a period of catch-up after the lockdown.
Emil Domeracki of Colliers International