Ten years of Poland in the European Union – a view from the residential market

Ten years in the European Union has changed many aspects of life in Poland, including the residential market. In this period we have emerged from through two main stages. The first stage occurred in 2004–2008: the boom. In this period we saw very high demand perpetuated by easy access to cheap loans denominated in Swiss francs. Unfortunately, the demand considerably outstripped the supply, which fuelled rapid price increases, thus reducing the availability of apartments to average buyers. Just as the collapse of Lehman Brothers was the symbolic beginning of the global credit crunch, for the Polish residential market the transfer from boom to bust was symbolised by the end of cheap loans in francs.

The second stage, the financial crisis, took place in 2009–2014. It was not a completely disastrous period because about the same number of apartments were built over this period than during the boom. The basic difference was that due to the withdrawal of speculative buyers from the market and the lower availability of apartments to potential ‘ordinary’ buyers due to the high prices, the more difficult access to financing and the higher cost of credit, developers were forced to adjust their offers to the more modest budgets of the buyers. It has to be stressed that the Polish residential market came through the credit crunch relatively unscathed, even though the typical difficulties that characterise such a crisis period, such as greater difficulties in financing projects or the slower pace of project selling, were exacerbated by additional limitations, including the so-called ‘development act’ and the imposition of restrictive regulations by the Financial Supervision Authority limiting the volume of new banks loans in the residential loan segment.

I think that the most significant achievement of the residential sector in the ten years of Poland’s EU membership has been the comparatively high number of modern apartments built in this decade. I would also include the smooth navigation of the crisis among the successes. When comparing us to other countries, such as Spain or Ireland, it has to be said that Polish developers were able to adjust to the difficult conditions much better, thanks to which we avoided the large number of spectacular bankruptcies seen abroad, as well as a large unsold oversupply of apartments and the wide scale bank takeovers of properties whose owners defaulted on their mortgages.

The fact that the issue of zoning plans still hasn’t been successfully resolved seems to be the largest failure of this period for me. The lack of clear zoning planning rules is contributing to more expensive and prolonged construction processes. Another continuing problem is the low availability of apartments to young people due to the high prices in relation to their earnings.