global financial crisis and its consequences for polish housing market

Global Financial Crisis and its Consequences for Polish

Housing Market

M.Sc. Konrad ZelazowskiDepartment of Investment and Real Estate

University of LodzLodz, Poland

email: kzelazowski@uni.lodz.pl

The aim of the article is to investigate

possible consequences of recent financial

crisis for Polish real estate market

development. Is it a temporary slowdown

or a long term collapse?

Number of flats per 1,000 inhabitants in EU Member States

Source: data provided by the Central Statistical Office (GUS) and EMF Hypostat 2006, A review of Europe’sMortgage and Housing Markets, European Mortgage Federation, November 2007

Supply of flats in the Polish real estate market

Source: Central Statistical Office (GUS)

State budget expenditures on the housing sector

Source: E. Kucharska-Stasiak Rynek nieruchomości a sektor bankowy, Fundacja na Rzecz Kredytu Hipotecznego 2008, p. 114.

Mortgage debt as percentage of GDP in European countries

Source: L. Nykiel, Rynek mieszkaniowy w Polsce w I kwartale 2009r.(Housing market in Poland in Q1 2009), Departament Bankowości hipotecznej PKO BP, 2009, p. 18.

Interest rate levels

Source: L. Nykiel, Rynek mieszkaniowy w Polsce w I kwartale 2009r.(Housing market in Poland in Q1 2009), Departament Bankowości hipotecznej PKO BP, 2009, p. 32.

Increase in mortgage debt in Poland

Source: L. Nykiel, Rynek mieszkaniowy w Polsce w I kwartale 2009r.(Housing market in Poland in Q1 2009), Departament Bankowości hipotecznej PKO BP, 2009, p. 32.

Increase in housing real estate prices

Source: redNet Consulting

Number and average amount of housing loans granted quarterly between 2003 and 2007

Source: E. Kucharska-Stasiak Rynek nieruchomości a sektor bankowy (Real Estate Market and the Bank Sector), Fundacja na Rzecz Kredytu Hipotecznego 2008, p. 128.

Dynamics of changes in real estate prices and construction costs for 1 sq. m.

Source: L. Nykiel, Rynek mieszkaniowy w Polsce w III kwartale 2008r.(Polish Housing Market in Q3 2008), Departament Bankowości hipotecznej PKO BP, 2008, p. 25.

The number of square meters of residential property purchasable for an average gross salary

Source: L. Nykiel, Rynek mieszkaniowy w Polsce w III kwartale 2008r.(Polish Housing Market in Q3 2008), Departament Bankowości hipotecznej PKO BP, 2008.

Value of P/R ratio for selected local markets

Source: Jacek Łaszek, Ryzyko wystąpienia bąbli na rynku nieruchomości mieszkaniowych, NBP, Warsaw, June 5, 2008, conference presentation.

Share of speculative demand in total demand for housing real estate (Warsaw market)

Source: redNet Consulting

Quarterly fluctuations in the number of new mortgage loans

Source: Open Finance report, 2009.

Housing price changes in major Polish cities

Source: L. Nykiel, Rynek mieszkaniowy w Polsce w I kwartale 2009r.(Polish Housing Market in Q1 2009), Departament Bankowości hipotecznej PKO BP, 2009, p. 41.

The main factors determining future changes in real estate prices in Poland will include the

following:

• availability of mortgages,• the macroeconomic situation,

• changes in salaries and the unemployment rate,• availability of external financing sources (loans)

for developers and construction companies.

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