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What is driving up housing prices? Will we observe their further increases? How fast are construction costs rising? Will the reduction in purchasing capacity and access to credit translate into a slowing down of demand and the growth of market rates? The survey was developed by the real estate website dompress.pl

Tomasz Kaleta, director of the Sales Department at Develia S.A.
Unfortunately, we are constantly observing an increase in the costs of building materials and general contracting. In some locations, the cost of building 1 meter of usable floor space has increased by as much as PLN 1,000-1,200 in the last 12 months. We observe a similar situation on the land market for new investments. The price increases that have been going on for many years go hand in hand with the shrinking offer of plots suitable for housing development. All this, combined with prolonged administrative procedures at the investment preparation stage, means that developers have a problem with proposing a supply corresponding to the persistently high demand for flats. In the past four quarters, 55.5 thousand units were launched on the six largest markets in Poland. apartments. This result is far from the records from 2017, when it was nearly 70,000. premises, as well as the level from 2019, when almost 64 thousand. apartments. As the demand-supply scissors open more and more, it is hard to expect a scenario other than further price increases.

Zbigniew Juroszek, president of Atal
Obviously, rising material prices have an impact on the industry. As a Group, however, we have an appropriate purchasing policy implemented, and we also have long-term relationships with suppliers, which allows us to obtain materials on competitive terms. The increase in purchasing costs is particularly noticeable in the projects launched, where the cost of land acquisition is also important, which has a significant impact on the final sale price. Currently, the situation forces us to optimize the processes even more so that the quality of delivered apartments is unchanged and the price is still acceptable to buyers.

Bartosz Kuźniar, president of the management board of Lokum Deweloper S.A.
The rates for raw materials and energy continue to grow dynamically, which translates into an increase in the costs of building materials. There are also large wage increases. Soon, new regulations will come into force, further increasing the costs incurred by developers, including contributions to the Development Guarantee Fund, higher health contributions, or greater co-financing of municipal investments related to the construction of housing estates, due to budget holes in communes caused by the Polish Government. In addition, very high prices of plots and the shrinking stock of land for multi-family housing, as well as prolonged administrative procedures cause problems on the supply side, and with higher interest rates also higher cost of housing construction. Residential investments will not be launched if the planned income from the sale of apartments will not be at least a dozen or so percent higher than the costs of their production, not only because such activity would not make sense, but also because no bank will provide financing for such an investment. Therefore, I expect a further increase in housing prices. Either the market will accept higher prices, or investments will not be launched and the offer will shrink even more.
Higher interest rates will limit the availability of a mortgage loan to some of the lowest-income customers looking for the cheapest flats, so not to our target group. These clients will probably seek to meet their housing needs by renting flats bought by better-off people. The demand for flats in large cities is strong and stable, because it results from their large shortage and relatively low prices in relation to Europe and in relation to wages in large cities. Therefore, I expect a further increase in home prices by at least a few percent quarterly while limiting their offer.

Małgorzata Ostrowska, director of the Marketing and Sales Division at J.W. Construction Holding S.A.
An increase in construction costs is inevitable due to galloping inflation and rising prices of building materials and, consequently, rising construction costs. According to NBP data, the prices of selected construction materials have increased since September this year. by about 27 percent None of the developers is able to compensate for such growth with a lower margin. Moreover, the increase in home prices is influenced by still high demand and insufficient supply. Flats are now about 10 percent. more expensive than last year. This pace of growth may continue in the coming year.

Edyta Kołodziej, Sales and Marketing Director at Nickel Development

Unfortunately, construction costs continue to rise and this is a problem that all developers and people who build houses or are at the stage of interior finishing struggle with. Over the past few months, the prices of steel profiles for mobile building have almost tripled, the price of wood has increased by 200%, as has the price of copper. Construction services also became more expensive. Of course, all this has an impact on housing prices, which continue to rise. The coming months will show whether the rise in interest rates will affect the supply and prices of housing.

Cezary Grabowski, sales and marketing director of Bouygues Immobilier Polska
The prices of flats determine, first of all, the costs of their construction, and these continue to grow. This is due to many factors: ever higher land prices, abruptly rising prices of building materials, as well as a systematic increase in wages. All this means that a further increase in housing prices should be expected. However, it is difficult to say at what level. A price increase is very likely even with less supply as there are currently no indications that these market trends will weaken. The more so as macroeconomic factors do not herald a reduction in demand at present.

Joanna Janowicz, managing director at Constructa Plus
Unfortunately, construction costs continue to rise. I would like to draw particular attention here to the rising prices of fuels and energy. It is not directly related to construction, but it significantly affects the price level of all services and goods that we buy to produce our product. Today we can speak of a true spiral of price growth, driven by many interrelated factors. Based on the current knowledge, we forecast two possible scenarios that may or may not be realized simultaneously. In the first of them, investors who are not currently determined or obliged by contracts or initiated actions will simply wait with the investment. In the second, entities that do not have to finance investments with debt will build and sell ready-made apartments, calculating prices according to real cost, and not forecasts to which they are obliged by a loan agreement. Unfortunately, both scenarios generate a further increase in prices, as the demand for flats does not decrease. We are still dealing with a housing deficit. This means that any increase that cools down the demand for real estate purchases simultaneously increases the demand for long-term rental and the resulting demand from investors.

Marcin Michalec, CEO Okam

On the one hand, the current world situation, as well as the increase in fuel, energy and construction raw materials prices, translate into the prices of building materials, and this in turn has a direct impact on the average construction cost of 1 sq m. On the other hand, rising inflation will certainly have an impact on the purchasing situation, limiting the purchasing power of some Poles. Although some experts forecast a further increase in the prices of construction products in the coming months, but not with such intensity as on the occasion of the highest increase in steel prices in ten years, a gradual stabilization or a slow downward trend in some product categories is also possible.

Bartłomiej Mandryga, head of the sales and marketing department of PCG S.A.
Building material and labor costs continue to rise and it is difficult to predict when prices will stabilize. The hot development market still has a high demand for construction materials, and deficits in some sectors are driving up prices. They are also influenced by rising inflation. Therefore, it is impossible to keep housing prices at the same level for a long time and they must be subject to increases. In the coming months, we do not expect a reduction or a slowdown in rates per square meter, and the current interest rate increases do not significantly affect the availability of loans or the purchasing power of Poles, so they will not reduce demand.

Boaz Haim, CEO of Ronson Development
Land prices are rising in an uncontrolled manner and disproportionate to rising housing prices. Construction costs are also rising, with extreme increases in steel prices and labor costs. In addition, interest rates are rising and market forecasts indicate further increases. If we add to this the shortage of land for development and the extension of the period of obtaining a building permit, I see no possibility of lowering housing prices. I expect an increase of 3-4 percent. annually.

Jarosław Kozak, President of the Management Board of Waryński S.A. Holding Group
It is certain that the costs will not decrease, which in turn will not lead to a reduction in home prices on the primary market. We do not know 100% how the market will behave after an increase in interest rates, and above all after the fourth wave of the pandemic. What measures will the government take, will the actions limit the supply and production of means, raw materials, asphalt, steel, etc.
We definitely do not expect a repeat from 2008. The bubble that would lead to such a massive fall in prices in the real estate market, but also in other sectors, will no longer take place. The covid situation and its long-term impact will not allow the market to "burst" and prices to fall. The housing economy will not slow down, it will only be frozen for some time due to possible shortages of components. And this, unfortunately, may delay construction. Many planned activities depend on the intentions of the government, whether lockdowns will be introduced, increased economic fear or panic on the market.

Zuzanna Dobra, Commercial Director at Eco Classic

With the currently significant disproportion between supply and demand, the only consequence of increasing interest rates and changes in the method of calculating creditworthiness that we anticipate is a slowdown in the growth rate of housing prices. Construction costs continue to rise, amplified by rising inflation.

Mariola Żak, sales and marketing director at Aurec Home
The increase in interest rates does not mean a sudden collapse of Poles' creditworthiness. When it comes to construction costs, several important factors must be mentioned. Fuel prices have been the highest for many years and this affects the costs of transporting building materials, just like other products, which translates into high inflation. The prices of steel and wood have been rising for many months. But the most shocking thing is what happened to them in the last month. The growth dynamics reached over 21%. Every year. What got him up so much? Here are a few examples: OSB boards have increased by 124.7 percent in the perspective of the year, dry construction by more than 60 percent, and thermal insulation by about 53 percent. On the other hand, in the third quarter of this year. Poles also increased their salaries by 9.4 percent. compared to the same period last year. If wages grow faster than inflation, price increases should not bother us much.

Janusz Miller, Sales and Marketing Director of Home Invest
Everything indicates that apartment prices will continue to grow in the near future. However, the pace of growth may not be as fast as it has been over the past few months. On the other hand, rising construction costs, land prices and protracted administrative decisions will reduce the supply of apartments. In addition, there are also purchases of entire buildings by foreign funds. Therefore, a further increase in housing prices seems to be inevitable.

Wojciech Chotkowski, President of the Management Board of Aria Development
The increase in material prices is significant, which is a derivative of what is happening on the raw material markets. Too high dynamics of price increases means uncertainty in planning new investments. The development of the estate takes about two years and this is also the time of exposure to the risk of changes in costs. It seems that their current growth will contribute to increases in housing prices, especially in the projects that are underway. Due to the recent increase in interest rates, the purchasing power of people applying for a loan will drop by several percent, but it is difficult to forecast further developments, as the Polish monetary authorities do not pursue a transparent information policy regarding the projection of interest rates.

Joanna Chojecka, sales and marketing director for Warsaw and Wrocław at Robyg S.A.
The dynamically rising costs of building materials have an impact on the entire residential real estate market, and above all on apartment prices. The scale of cost increases is similar across Poland and it is difficult to differentiate it into individual cities. All our investments are carried out according to the schedule, but the entire market is clearly showing a smaller supply.
The analyzes of the housing market show that the supply does not keep up with the demand, which is the result of high interest in buying apartments combined with slower introduction due to lengthy administrative procedures. For example, in Warsaw, usually the developers' offer was sufficient for three quarters of sale, and now it has shrunk and allows to meet the demand for about three months. This is the direct cause of the price increases, along with the rising prices of land and building materials. Therefore, it is very important that local governments speed up administrative procedures in this area as much as possible.

Sebastian Barandziak, president of the management board of Dekpol Deweloper
The costs of construction materials and services continue to rise, which may translate into a further increase in housing prices. The decreasing supply of land for investments also exerts a strong pressure on further increases. As a result, the purchase of land for construction is becoming more and more expensive. In our opinion, the recent changes caused by the increase in interest rates will have a marginal impact on the market and we do not expect a significant deterioration in the creditworthiness of buyers in the near future.