As Q2 2011 has come to its end, the latest edition of residential market reports prepared by Emmerson Market Research Department was published. The reports are prepared for seven main housing markets in Poland which are: Warsaw, Krakow, Wroclaw, Gdansk, Poznan, Lodz and Katowice. The main conclusion for the past quarter was that new flats are becoming cheaper.

Table 1. Average asking prices for new flats in particular cities, Q1 2010 – Q2 2011 (in PLN thousands per sqm)

Source: „Primary housing market” series of reports, Emmerson Market Research Department

As show in the table, the highest declines in asking prices between Q1 2010 and now were noted in Wroclaw and Krakow. On the contrary the lowest decreases characterized the market in Gdansk and Lodz. Within the analyzed group of seven cities Katowice are a sort of  exception which proves the rule – the average price has grown since January 2010. What are the forecasts for the future? It seems that next change in prices (no matter what direction: up or down) will be mainly fuelled by a demand side of the market. Several things which will probably squeeze demand level has already happened and several more are about to happen in the future. These are: four increases in interest rates in Poland and planned changes in the “Family on its own” programme. Both factors will fuel negative consequences for a financial affordability to purchase a flat by an average Pole. That is why developers struggling to sell their units may be force to introduce following declines in prices in order to find a buyer.

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