Over the past few years, the companies which have been researching the residential property market in Poland have only presented average prices which are taken from the selling market, regardless of whether the apartments are sold or not.


This has not represented the true situation on the market, as it includes many overpriced apartments which will never sell. New research from the consultancy Rednet, however, has now compared three prices - the average price of apartments for sale in the selling offer (OFFER price), the average price of apartments actually sold (SOLD price), and the average price of apartments introduced in the primary market, those available from developers (DEVELOPER price). Some surprising results can be observed across Poland.

The most striking different in the three different prices occurs in Warsaw.


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WARSAW


OFFER price: 9246 PLN/m2


SOLD price: 8127 PLN/m2


DEVELOPER price: 9895 PLN/m2.


This indicates that the average price per m2 of new flats introduced to the market by developers in the last quarter is almost 22% higher than the average price of the flats actually sold in the same period.


A similar situation can be seen in the Tri-City and Wroclaw, and to a lesser extent, Poznan and Lodz. There was only two major cities, Krakow and Katowice, which recorded only slight differences.


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TRI-CITY (GDANSK, GDYNIA, SOPOT)


OFFER price: 7657 PLN/m2


SOLD price: 6517 PLN/m2


DEVELOPER price: 7810 PLN/m2.


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WROCLAW


OFFER price: 8204 PLN/m2


SOLD price: 7402 PLN/m2


DEVELOPER price: 8757 PLN/m2.


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POZNAN


OFFER price: 7919 PLN/m2


SOLD price: 7621 PLN/m2


DEVELOPER price: 8393 PLN/m2.


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LODZ


OFFER price: 5981 PLN/m2


SOLD price: 5488 PLN/m2


DEVELOPER price: 6113 PLN/m2.

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KATOWICE


OFFER price: 6308 PLN/m2


SOLD price: 6257 PLN/m2


DEVELOPER price: 6367 PLN/m2.


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KRAKOW


OFFER price: 8119 PLN/m2


SOLD price: 7987 PLN/m2


DEVELOPER price: 8240 PLN/m2.


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What is the reason for these discrepancies in price?


Partly, the reason for this situation lies in the real estate boom experienced in Poland between 2004-2007. Overly optimistic developers paid too much for plots in the hope that the sales prices would keep rising. They have now met resistance from buyers who will not pay for overpriced flats, particularly in suburbs where there is a lot of other developers offering apartments.



What can also be witnessed across Poland is an increase in the supply of apartments for sale. This means it is a buyers market, and those looking for an apartment can behave rationally, rejecting overpriced offers, regardless of whether it is an expensive or cheap suburb.

At the same time, there is still strong buyer competition for reasonably priced flats in good locations.