Premium real estate market in Warsaw – analysis of the current situation part II
We wrote about how the market reacted in the first days of the lockdown in the article „Real estate premium market in Warsaw – analysis of the current situation”.
Have more than two months of living in the new reality affected the prices of premium real estate in Warsaw? What are the experts’ predictions for the coming months? Is this a good time to sell? What will the premium real estate rental market be this year? In this article, we analyze the current market situation and forecast trends for the near future.
ON THE PREMIUM SALES MARKET, ACTIVITY RETURNS TO THE BEFORE-PANDEMIC LEVEL
The situation in the world forced us to change our habits and everyday behavior. Lions Estate has adapted its activities to the new situation and continues to support clients despite the pandemic. While maintaining proper precautions, including the use of virtual visits and remote contract finalization, during the quarantine period, we have completed over a dozen rental and sale transactions.
Although there was a natural slowdown and halt in market activity at the beginning of the quarantine, the number of purchasing customers today is practically the same as before the pandemic. Our consultants are currently actively searching for many demand customers.
The most sought-after are 3-4-room apartments in Mokotów (2-3 million), approximately 100-meter apartments in tenement houses in Śródmieście and houses in Mokotów, Wilanów and Zawady. We also have a lot of inquiries about houses in Konstancja Housing Estate, near the American School.
Similar conclusions about customer activity can be drawn from the survey conducted by the Otodom portal. The results of a survey of 5,050 respondents show that while 70% of sellers and 75% of buyers a month ago believed that the coronavirus would affect their housing plans, now those numbers have fallen by 8% and 9%, respectively. In contrast, 34% of buyers and 38% of sellers say the virus will not influence their transaction decisions.
REAL ESTATE PRICES DO NOT GO DOWN
The above-mentioned Otodom study shows that at the beginning of the pandemic, as many as 59% of buyers assumed that real estate prices would fall due to the new situation, currently only 51% of respondents count on it. Among sellers, this trend is opposite, but the discrepancy is smaller – 38% of them believe that real estate prices will fall, as 34% of respondents previously said.
It must be taken into account that the statistics relate primarily to the popular real estate segment. In the premium real estate market, which has different laws, these fluctuations are even less likely.
„There are occasions, but not on a massive scale. The luxury real estate market is rather resistant to various turmoil and we do not expect significant price drops in the near future. We can see that our clients are intensively looking for real estate to buy. There is no indication that this will change any time soon.”
– says Paula Perz, Premium Property Advisor at Lions Estate.
„The most likely scenario of the pandemic’s impact on the real estate market is a slowdown in price growth. Real estate prices in Poland have been growing continuously in recent years, reaching record levels. I am not in favor of the forecast that prices will fall next year, as some experts have predicted. However, given the rise in inflation and the possible halt in property prices – for someone planning to sell their property – maybe now is the best time to.”
– comments Bartłomiej Annusewicz, CEO Lions Estate.
WILL RENATAL OF THE PREMIUM PROPERTIES INCREASE SOON?
Despite the epidemiological situation, we sign several premium real estate leases every week. Everything points to the fact that the situation will soon be even more dynamic, as the borders will open and corporate clients will return.
Over the last two months, most of the tenants we have worked with were former Poles. Expats, i.e. foreign corporate clients, could not come to Poland for obvious reasons. However, we are in constant contact with our clients. Some of them are already opting for “remote” rental.
„I expect a very intense time ahead of us when the countries borders will open”
– says Rafał Lewandowski, Partner and Premium Customer Advisor in Lions Estate.
„Currently, we also carry out many lease transactions remotely. Customers view the property at a distance, and then move in after completing the lease formalities. After the borders are opened, the traditional search for tenants will return on a larger scale “
– adds Lions Estate expert.
The most popular properties for rent, searching by the clients:
- houses (4-5 bedrooms) in the vicinity of international schools (Wilanów, Zawady, Sadyba, Konstancja Housing Estate, Saska Kępa, Mokotów, Konstancin) with clients budget of 12,000-28,000 / month
- apartments with 3-4 rooms (Wilanów, Mokotów). Budget: 8,000-14,000/ month
- apartments in Śródmieście and Powiśle (2-3 rooms); Budget: 6,000-20,000/month
„If all planned relocations of corporate clients succeed, the season should be successful. We are moderately optimistic here and we encourage you to contact us regarding your offers “
– says Alicja Chmura, Premium Property Advisor at Lions Estate.
WHICH THREATS ARE STILL CURRENT?
We still do not know what consequences the pandemic will have on the economy. Currently, real estate prices remain stable, but the transaction volume has decreased. Despite the fact that it affects the premium segment to a lesser extent, some buyers still count on a reduction in property prices (this or next year) and postpone the purchase decision. The results of the cited studies show, however, that fewer and fewer people have such assumptions.
Another issue is the tightening of lending policies by banks. 20% of own contribution is often not enough to get a mortgage. Margins are also rising (although interest rates are falling), and experts assume that banks will refuse more loan applications.
Of course, the pandemic has an impact on the real estate market. The positive trends that we are observing are the increasing demand for larger properties, apartments with terraces or houses with a garden. This suggests that the luxury real estate segment will not suffer from the current situation, but the preferences of buyers will change.
IF YOU HAVE ANY QUESTIONS REGARDING THE RENTAL, VALUATION OR SALE OF YOUR PROPERTY, PLEASE DON’T HESITATE TO CONTACT OUR EXPERTS:
Rafał Lewandowski, Partner Lions Estate
mobile: +48 667 664 070 email:firstname.lastname@example.org
Paula Perz, Partner Lions Estate
mobile: + 48 694 315 662 email:email@example.com
Alicja Chmura, Premium Property Advisor
mobile: +48 533 225 562 email:firstname.lastname@example.org
Maria Góralczyk, Partner Lions Estate
mobile: +48 570 990 469 email:email@example.com
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