The increase of ‘density’ on the property market, together with the increase of the cost of building and better economic situation – those were the hot topic on the property market in 2018. It seems that the economy is slowing down now, which means we will all face its consequences in a couple of months.
What will happen in the nearby future on the property market? Find out and adjust your investment strategy accordingly.
Additions to the apartments
The property market is growing, and so are the needs of the clients – hence the increasing profesionalisation of services and goods, which generates more value for the clients but also more competition amongst the developers. The most popular option is buying a garage, a parking lot or a storage room together with a flat. More and more often the developers are offering also finishing off the house (tailor-made), concierge services or smart home systems.
A similar way of making profit can be used in our investment strategy. Let’s think of what we can offer to our potential clients and let’s adjust our property accordingly. For example families often look for extra storage room. When you rent your apartments out to students you can divide the whole space into smaller rooms and as a result generate more profit. An apartment for a woman or a couple can be rearranged to make some space for a more and more popular walk-in wardrobe.
The slow down of prices increase
The increase of prices should slow down a bit in 2019 but for sure the prices will not start going down as they are affected by the increase of the salaries of the subcontractors, the high prices of building materials and less and less of the building plots available (especially near the citi centres).
The market is slowly getting full of new apartments, that have been sold in spectacular numbers this years. The prices of the flats from the primary market will keep going up, but a lot slower. The increase is going to be small and steady. It might happen that the flats from the secondary market will become popular again. There is still space for 2.1 million of flats on our market (according to various sources). The demand is still higher than the supply.
The premium-quality properties boom
With the growing demand from the market, the selection of the flats becomes more and more varied. There are some properties on the market which would have been unheard of a dozen of years ago – for example some families decide to go for undetached rent-free houses outside of the cities, which give them freedom of arranging the rooms and attic according to their own taste. The premium-quality properties are the most standing-out part of the Polish property market. As the society is getting richer and richer, the apartments in prestigious districts, elegant penthouses and expensive villas (both in the cities and facing the seaside) are becoming more and more popular amongst the middle class. Those premium-quality properties are an alternative to locating (significant) funds in a bank.
Buy to rent – as long as the mortgage credits are cheap.
Buying flats to rent them out is the most popular way to invest in properties, which has been chosen by many within the last few years – and this is also thanks to historically low interest rates. More and more citizens of our country prefer investing in properties to keeping their money in a bank. This trend can also be seen in the offering of the developers, who often advertise their apartments as ‘perfect for rent’.
It is possible that interest rates will go up next year, which in turn will make the mortgage credits more expensive and the investment possibilities less attractive.
When you decide on your investment strategy for 2019, consider both the economic factors (i.e. market slow-Adown and interest rates increase) and the expected trends (growing demand for premium properties and flats for rent, tailor-made additions to the apartments). Adjust your strategy to these factors and the needs of the buyers and enjoy even greater profits this year. Good luck!