Poland sees surge in sales of unfinished homes amid market troubles

With borrowing rates at a multi-year high, the prices of construction materials rising, and double-digit inflation, many Poles have been prompted to put their unfinished homes up for sale.

The number of active listings for “shell home” sales by private sellers on Otodom, a leading real estate sales and rental listing website, was the highest in three years in the first quarter of 2022, reports Business Insider Polska.

In the same period, the sales of new developments reported by publicly traded developers fell by 22% year on year – the highest fall in a decade – say analysts at Pekao, one of Poland’s biggest banks.

The new data come after the price of construction materials – which had already been rising due to pandemic-induced supply-chain problems – jumped further after the Russian invasion of Ukraine, which prompted sanctions on Russia and Belarus and the suspension of imports from Ukraine.

According to preliminary data from Statistics Poland (GUS), a state agency, construction and assembly production prices increased by 9.3% year on year in February. In March – the first full month of the war – the figure reached almost 30%, according to Grupa PSB, Poland’s largest building material wholesaler network.

Meanwhile, the finances of Polish borrowers – already strained by the highest inflation in over 20 years – have suffered after a recent series of rate hikes sent the average home loan instalment up by over 40% to 1,958 zloty (€422) in the six months to March 2022, according to Credit Information Bureau data.

Those calculations do not include the 1 percentage point interest rate increase introduced in April.

In the face of these financial pressures, some had to give up the dream of homeownership. This marks a shift in trend after a construction boom in recent years that saw a record amount of new housing delivered for use in Poland in 2021.

Analysts think this shift, even if still relatively a minor one, could signal a change in the market, reports Business Insider. The number of building permits, for example, fell by nearly 21% year-on-year in January, according to GUS.

However, according to experts, including Poland’s central bank governor, this is unlikely to translate into lower house prices. A report by HRE investments finds that the acute housing shortage in Poland may prevent prices from falling.

Main image credit: Stefan Lehner/Unsplash

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.