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Why are flats constantly getting more expensive in Poland?

A studio apartment for PLN 350 - 500,000 in Warsaw? Here you are. In smaller cities it is not much better, for PLN 200,000 in many people you cannot even afford a studio apartment, well, this is the atmosphere we have. The real estate market does not seem to stop and has no intention of slowing down, and has been said to be "pumped up" for a long time.

Thanks to this, an ordinary person can practically no longer afford his own corner without taking a loan, which he will then pay off for 20 years. The question is, what is behind this situation and can it change at all? Until recently, I was honest with some people that after the pandemic, prices will start to fall within a year or so, because it turns out that many people no longer want to invest in real estate due to a lack of cash, and those who have signed up under the traffic jam will slowly fall into problems with liquidity… for various reasons, such as an increase in interest rates.

7 reasons for expensive housing in Poland

So far, however, this is not the case. Why? Below are some factors that I think contribute to this:

Cheap credit and easy access to it - more and more people use it. The lower the "entry threshold", the higher the turnover in the market. This can be seen in the data on the number of applications for real estate loans submitted to banks. Banks have to do something with the money, and they are more likely to lend against collateral than regular cash. Low interest rates translate into attractive loan terms, but they can also be dangerous if rates start to rise.
Low own contribution required, which is already accepted in many banks at the level of 10%, encourages people who have practically no savings to buy real estate. Not necessarily for housing purposes ...
Planned further subsidies, subsidies and support from the government - we already know more or less what it will look like in the "Polish new order" (loan subsidies, etc.), which of course will result in further increases on the real estate market.
High inflation - If vegetables become more expensive by a dozen percent a year, and building materials even 30% in a few months, people are looking for something that will maintain the value of their savings, fixed assets, and there are not many alternatives on the market.
Speculation, marketing, etc. - everything related to the industry of development, investment training, flipping etc. resulting in an influx of new potential investors or people looking for quick and very large easy profits on the real estate market.
Interest from large investment funds - this is already happening, for example, Scandinavian investment funds buy thousands of flats from Polish developers in order to rent them out later. The developer will sooner adapt to such a player, if the prices are ok for him, why should they be lowered for other customers.
Inflation again and rising prices for building materials - if someone is building now, he knows why it can't be cheaper now. Since spring, the prices of materials have probably increased by 30% and investors and developers are also bearing these costs, and will pass them on to customers.

Will it be cheaper?

Can prices freeze or stop? At the moment it seems not. At least as long as interest rates are so low that bank deposits offer close to zero interest. Cheap loans and subsidies will only wind up the situation, so it will be more advantageous for an ordinary Kowalski to build a house in the countryside or in a smaller town than to buy a very expensive real estate in the city.

And in terms of investment? Everyone should judge for themselves. The only question is whether it is worth entering this market without savings, with a contribution close to zero and on credit, as promoted by some investment gurus. However, it seems very risky, more or less like taking foreign currency loans in the past.

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