KRAKOW REAL ESTATE MARKET 2014 P.II
Transcription
KRAKOW REAL ESTATE MARKET 2014 P.II
KRAKOW REAL ESTATE MARKET 2014 P.II KRAKOW 2015 Partners Instytut Analiz Monitor Rynku Nieruchomości mrn.pl www.mrn.pl e-mail: zarzą[email protected] KRN Media www.krnmedia.pl e-mail: [email protected] Krakowski Serwis Mieszkaniowy dominium.pl www.dominium.pl e-mail: [email protected] Prices Prices in the report are quoted in PLN or EUR, depending on the transaction; often one of the currencies is referred to as the basis for defining the value. Average currency exchange rates are published every day on the website of the National Bank of Poland (www.nbp.pl) Measures used in Poland 1 ar =100 m2 = 0.01 hectare (ha) 1 hectare = 10,000 m2 = 100 ars (ar) Graphic Design: Advert Studio Photo: Anna Kaczmarz (pages: II) Rafał Lewandowski (pages: 7, 10, 13, 17, 23, 27, 28, 31, 33, 34) Wiesław Majka (pages: cover, 1) Translation: LINGUA LAB Translation & Localization Services 01 PRIMARY REAL ESTATE MARKET 07 SECONDARY REAL ESTATE MARKET – OFFER PRICES 10 THE SECONDARY REAL ESTATE MARKET – TRANSACTION PRICES 13 RENTAL OF APARTMENTS AND HOUSES 17 TENEMENT HOUSES AND HISTORIC AREAS 20 SINGLE FAMILY HOUSING IN KRAKOW 23 SINGLE-FAMILY HOUSES IN THE SUBURBAN AREA OF KRAKOW 28 LAND IN KRAKOW 31 LAND IN THE SUBURBAN AREA PRIMARY REAL ESTATE MARKET Results of housing construction According to preliminary data of the Statistical Office in Krakow, from January to December 2014 in the capital of Małopolska, 7,361 apartments were completed, i.e. 4.5% more than in the previous year and over 7.8% more than two years ago. Starting from 2010, the number of completed apartments has been steadily growing. In total, in the last five years in Krakow, more than 30,800 apartments were completed, and in the last ten years, a total of more than 63,850 apartments. Therefore, the result for 2014 is higher than the average for the past ten years by almost 1,000 apartments. (Chart 1) Since 2010, the index informing about the number of apartments under construction has been on a high level. In 2014 investors started the construction of 9,266 apartments, i.e. 7% more than the year before. In the last five years, the construction of more than 45,500 apartments began. However, since 2010, the number of apartments for which construction permits were issued, has decreased. In 2014, building permits were issued for 5,591 apartments, i.e. over 25% less than in the previous year. In 2014, in Krakow, only two types of investors put apartments to use. Apartments for sale and rent dominated (implemented by developers), which accounted for 85% of the total pool of completed apartments. 15% of apartments were completed by individual investors, and no apartments were completed within other forms of housing construction (cooperatives, company, municipal, social rental). 0 Distribution of investments According to the portal Dominium.pl, at the end of December 2014, most – 41% of all Krakow investments, were offered in Podgórze. A similar number of investments was recorded in the city centre (Śródmieście) (22%) and Krowodrza (24%). As in previous years, the smallest number of investments were offered in Nowa Huta, approx. 13%. In comparison to the previous year the percentage of investments implemented in Krowodrza decreased, whereas the share of investments in the city centre and Nowa Huta slightly increased. (Chart 2) Distribution of apartments At the end of the fourth quarter of 2014, the Dominium.pl database included 7,480 apartments offered by Krakow developers. Assuming that the rest of the market offer included approx. 15% more apartments, the general pool of offered apartments may be estimated at approx. 8,600. According to Dominium.pl most apartments (in total almost 40% of the entire offer) were offered in three districts: Podgórze (XIII), Prądnik Biały (IV) and Grzegórzki (II). Many apartments were also on sale in Dębniki (VIII), Czyżyny (XIV), Prądnik Czerwony (III), Bieżanów-Prokocim (XII), Podgórze Duchackie (XI) and the Old Town (I). In total, these nine districts offered 83% of all the apartments, whereas the remaining districts offered only 17%. The smallest offer of apartments was recorded in three districts of Nowa Huta: Bieńczyce (XVI), Wzgórza Krzesławickie (XVII), Nowa Huta (XVIII) – a total of less than 1.5% of the offers. (Table 1) III.1-1 Chart 1. The number of completed apartments (put to use), apartments for which building permits have been issued and apartments, whose construction started in Krakow in 2009-2014 Source: Based on data of the Statistical Office in Krakow 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2009 2010 2011 Apartments for which building permits have been issued 2012 2013 Apartments under construction III.1-2 2014 Completed apartments (put to use) III.1-3 III.1-5 % 10 20 30 40 Chart 2. Distribution of offered housing investments in Krakow (December 2014) 50 60 70 Podgórze 41% Krowodrza 24% Śródmieście 22% Nowa Huta 13% 80 Source: Dominium.pl III.1-2 2012 2011 2013 2014 III.1-3 III.1-4 III.1-6 Chart 3. 50 60 70 80 Distribution of the offered apartments in Krakow (December 2014) Source: Dominium.pl III.1-7 % 10 20 30 40 Podgórze 41% Śródmieście 25% Krowodrza 20% 50 Nowa Huta 60 70 14% 80 III.1-4 III.1-5 % 10 20 30 40 50 60 70 80 Śródmieście Chart 4. Distribution of investments in the area of Krakow according to completion dates (December 2014) Krowodrza Podgórze Nowa Huta Source: Dominium.pl III.1-7 % Śródmieście Krowodrza 10 20 30 40 50 60 70 80 10 20 30 40 50 60 70 80 III.1-7 III.1-8 Chart 5. % Podgórze Nowa Huta Distribution of apartments in the area of Krakow according to completion dates (December 2014) III.1-8 Source: Dominium.pl Completed 2015 2016 In Krakow, theIII.1-9 district of Podgórze was dominant with more than 40% of all offered apartments. The smallest number of apartments were sold in Nowa Huta (just over 14%). The city centre and Krowodrza were in the middle of the ranking, with nearly 25% and 20%, respectively. In comparison to the previous year, the shares of Podgórze decreased, whereas the shares of all the other areas increased. (Chart 3) III.1-9 Investment completion dates At the end of December 2014, the housing investment offer was dominated by apartments with the status of “completed” or the date of completion estimated at end of the year – such investments accounted to approx. 62%. In 2015, nearly 25% of investments are to be 2 2 000 4 000 6 000 8 000 10 000 completed, PLN/m and in the next year – 14%. Most of the completed investments were located in the city centre, and the least in Krowodrza. In the previous year, completed investments in the entire city accounted for than 70% of investments. (Chart 7) Stare Miasto (I) Zwierzyniec (VII) Apartment completion dates Krowodrza (V) 2 In comparison to the situation end of December share PLN/m 2 000 in the previous 4 000 year, at the 6 000 8 0002014, the 10 000 (II) in the offer of developers decreased. There were 32% of such of completed Grzegórzki apartments apartments, whereas Bronowice in (VI)December 2013 – 45%. The offer was dominated by apartments Staredates Miastoin (I) with completion Podgórze (XIII) 2015 (44%). 24% of apartments are to be completed in the following year.Zwierzyniec (Chart 8)(VII) Dębniki (VIII) Krowodrza (V) Prądnik Biały (IV) percentage Grzegórzki (II) of completed Prądnik Czerwony (III) The highest apartments (approx. 35%) was located in the city centre and Podgórze, and the least (less than 15%) – in Nowa Huta, where the percentage Bronowice (VI) of apartmentsCzyżyny to be (XIV) completed in 2015 was the highest (71%). The city centre was the area Podgórze (XIII) Łagiewniki-Borek Fałęckialready (IX) in which the pool of apartments completed and those to be completed in 2015 (VIII) Podgórze Duchackie (XI)Compared to 2013, the share of completed apartments and 2016 wasDębniki at a similar level. PrądnikinBiały (IV) decreased mostly In December 2014 there were over 30% of such BieńczyceKrowodrza. (XVI) Prądnik Czerwony (III) apartments, while in the previous Bieżanów-Prokocim (XII) year almost 57%. (Chart 5) Czyżyny (XIV) Mistrzejowice (XV) Łagiewniki-Borek Fałęcki (IX) Swoszowice (X) Podgórze Duchackie (XI) Wzgórza Krzesławickie (XVII) Bieńczyce (XVI) Nowa Huta (XVIII) Bieżanów-Prokocim (XII) Mistrzejowice (XV) Swoszowice (X) Wzgórza Krzesławickie (XVII) Price structure In December 2014, the Krakow real III.1-10 estate offer was dominated by apartments 2 in the 5-7 thousand PLN/m price range. % 5 10 Such apartments constituted 63%. The second price range: 7-9 thousand PLN/m2 represented approx. 25% of the Krakow offer, and approx. 8% III.1-10 – the cheapest apartments, were the 2 5 % 10 price did not exceed 5 thousand PLN/m . 12 000 4 pokoje Proportionally, the smallest percentage 5 i więcej pokoi (4%) were apartments for which buyers had to pay more than 9 thousand PLN/m2. As the asking price is usually not provided in the case of more expensive locations, it may be assumed that the share of the 12 000 4 pokoje III.1-11 most expensive apartments is actually % 5 i więcej pokoi 5 slightly larger. (Chart 9) do 30 m² III.1-11 % 5 do 30 m² 81-90 m² 91-100 m² 101-120 m² ponad 121 m² 0 81-90 m² 91-100 m² 101-120 m² ponad 121 m² The price level in particular districts In December 2014, the highest average prices were recorded in the Old Town district (I). Average housing prices in that district reached almost 11 thousand PLN/m2, and in some luxury projects – up to 15 thousand PLN/m2. The second most expensive Krakow district was Zwierzyniec (VII), where the average price per m2 of an apartment was approx. 1 thousand PLN less than in the Old Town. In Bronowice (VI), Grzegórzki (II) and Krowodrza (V) districts the average prices ranged from 7-8 thousand PLN/m2. At the other extreme were two Nowa Huta districts: Nowa Huta (XVIII) and Wzgórza Krzesławickie (XVII), and Swoszowice (X). The average prices in these locations did not exceed 5 thousand PLN/m2. In four other Nowa Huta and Podgórze districts: Mistrzejowice (XV), Bieżanów-Prokocim (XII), Bieńczyce (XVI), Podgórze Duchackie (XI), the average prices were in the range of 5-6 thousand PLN/m2. Average prices in the range of 6-6.8 thousand PLN/m2 were recorded in the following areas: Łagiewniki-Borek Fałęcki (IX), Czyżyny (XIV), Prądnik Czerwony (III), Prądnik Biały (IV), Dębniki (VIII) and Podgórze (XIII). The average price of 1 m2 of a new apartment, defined as the average price in the districts, amounted to, in December 2014, 6,574 PLN and was 1.1% lower than in the previous year. % 80 in different 10 prices20 30 districts 70 months 40changed50over the60 Although the in particular period of 12 directions, as a result of a large influx of new projects and the sale of old offers, it may be concluded that the average price in the city remained stable. III.1-7 Distribution of apartments according to the number of rooms The offer of apartments in December 2014 was dominated by 2- and 3-room apartments, which in total accounted for almost 80% of the offer. The structure of apartments was complemented by studio flats which accounted for over 13%, and 4-room apartments (6%). Less than 1% of the offered units were apartments with more than 4 rooms. Distribution of apartments according to floor area The chart showing the distribution of offered apartments according to floor area clearly indicates that the offer of the Krakow market is dominated by apartments in 410-50 m2 and 51-60 m2 range. (Chart 11) In total, apartments with such a floor area constitute half of the total offer. Smaller apartments (31-40 m2) and larger dwellings (61-70 m2) have a similar III.1-9 share, and constitute approx. 15% of the offer. The share of other floor area ranges is less important and does not exceed a few percent of the offer. PLN/m2 2,000 Stare Miasto (I) Zwierzyniec (VII) Krowodrza (V) Grzegórzki (II) Bronowice (VI) Podgórze (XIII) Dębniki (VIII) Prądnik Biały (IV) Prądnik Czerwony (III) Czyżyny (XIV) Łagiewniki-Borek Fałęcki (IX) Podgórze Duchackie (XI) Bieńczyce (XVI) Chart 6. The average offer price of new apartments in the districts of Krakow (December 2014) Source: Dominium.pl Bieżanów-Prokocim (XII) Mistrzejowice (XV) Swoszowice (X) Wzgórza Krzesławickie (XVII) Nowa Huta (XVIII) 4,000 6,000 8,000 10,000 12,000 III.1-7 % 10 30 20 III.1-4 III.1-4 50 40 80 70 III.1-6 III.1-6 60 III.1-8 III.1-9 Completed 62% Completed 32% 2015 24% 2015 44% 2016 14% 2016 24% Up to 5 thousand PLN/m2 III.1-10 8% Up to 5-7 thousand PLN/m 63% Up to 7-9 thousand PLN/m2 25% Over 9 thousand PLN/m2 4% 2 % III.1-8 III.1-8 5 10 15 20 25 1 pokój Chart 7. PLN/m 2 Chart 8. Investment completion dates in Krakow 2 000 4 000 (December 2014) 6 000 Chart 9. Apartment completion dates in Krakow 8 000 10 000 (December 2014) The offer price structure of apartments in Krakow 4 pokoje (December 2014) 12 000 5 i więcej pokoi Source: Dominium.pl Source: Dominium.pl Source: Dominium.pl Stare Miasto (I) Zwierzyniec (VII) Krowodrza (V) III.1-11 Grzegórzki (II) % 5 10 15 Bronowice (VI) Podgórze (XIII) do 30 m² Dębniki (VIII) Prądnik Biały (IV) District 31 Share (%) Prądnik Czerwony (III) Stare Miasto (I) III.1-10 Czyżyny (XIV)III.1-10 5.7 5 Grzegórzki Łagiewniki-Borek %%(II)Fałęcki5(IX) 10 10 15 15 20 20 25 25 30 30 35 35 61-7 45 11.850 50 45 40 40 Podgórze Duchackie (XI) Prądnik Czerwony (III) 71-80 m² 7.5 Bieńczyce (XVI) pokój 11pokój Prądnik Biały (IV) Bieżanów-Prokocim (XII) 81-90 m² 12.3 pokoje 22pokoje Mistrzejowice (XV) Krowodrza (V) 3.8 pokoje 33pokoje Swoszowice (X) pokoje 44pokoje Bronowice (VI) Wzgórza Krzesławickie (XVII) 5 i więcej pokoi 5 i więcej pokoi Nowa Huta (XVIII)(VII) Zwierzyniec 91-100 m² 101-120 m² ponad 121 m² 2.8 1.0 Dębniki (VIII) 9.2 Łagiewniki-Borek Fałęcki (IX) III.1-11 2.0 III.1-11 %%(X) Swoszowice 55 10 10 15 15 20 20 25 25 1.9 3030 Podgórze Duchackie (XI) Bieżanów-Prokocim (XII) 6.1 do30 30m² m² do 41-50m² m² 14.9 41-50 Podgórze (XIII) 51-60m² m² 51-60 Czyżyny (XIV) 61-70m² m² 61-70 Mistrzejowice (XV) Bieńczyce (XVI) 6.8 31-40m² m² 31-40 71-80m² m² 71-80 81-90m² m² 81-90 91-100m² m² 91-100 8.7 4.1 1.0 Wzgórza Krzesławickie 101-120(XVII) m² 0.1 ponad121 121m² m² ponad Nowa Huta (XVIII) 0.3 101-120 m² Table 1. Distribution of the offered apartments in the administrative districts of Krakow (December 2014) Source: Dominium.pl 0 60 0 Summary The year 2014 was characterized by a large influx of new housing offers and at the same time a high level of sales. By balancing supply and demand, there were no significant changes in prices, and the average price per square meter of an apartment, based on the average prices in particular districts, changed only slightly. However, at the end of 2014, there were more apartments left in the developers’ offer than in the previous year, 70 which –80depending on the supply in the 80 70 first months of 2015 – may affect the price movements in the coming quarters. The good economic performance was shaped by stable prices, low interest rates, and partially supported by subsidies under the programme “Mieszkanie dla młodych” (Apartment for the Young). During the year, the investors’ offer included more and more locations and offers that met the criteria of the above government programme. In 2014, Krakow recorded the highest number of apartments put into uses since the beginning of the current decade. It is worth noting that only developers and individual investors completed their apartments in that year. The number of apartments whose construction has begun was also high. However, there was a significant drop in the number of building permits issued, which may result in a reduction of supply in the following quarters and years. As in previous years, most investments and apartments were offered in the area of Podgórze, and the least in Nowa Huta. There is a significant concentration of housing offers in several districts. Over 80% of all offers are located in nine districts of Krakow. In 2014, the percentage of completed apartments and investments dropped. Percentage like, theIII.1-8 smallest number of completed apartments were in Nowa Huta, and the biggest III.1-8 and Krowodrza. in Podgórze Approximately 80% of the offered apartments had two or three rooms and half of the units were in the 40 to 60 m2 range. At the end of December 2014, most of the Krakow apartments were in the price range of 5-7 thousand PLN/m2, and almost 90% of all units cost between 5 and 9 thousand PLN/m2. The most expensive districts in the city are the Old Town (I) and Zwierzyniec (VII), and at the other extreme, there is Nowa Huta (XVIII) and Wzgórza Krzesławickie (XVII). III.1-10 III.1-10 % 5 % 10 5 15 10 15 Chart 10. 8,000 8,000 10,000 10,000 20 20 25 30 25 30 35 35 40 45 40 45 50 50 1 room Distribution of apartments according to the number of rooms 12,000 (December 2014) 2 rooms 1 room 3 rooms 4 rooms 12,000 Source: Dominium.pl 2 rooms 3 rooms 5 and more 4 rooms 5 and more III.1-11 % III.1-11 5 % 5 10 10 15 20 15 20 25 30 25 30 Up to 30 m² 31-40 m² Up to 30 m² 31-40 m² 41-50 m² 51-60 41-50m² m² 61-70 m² 71-80 m² Chart 11. Distribution of apartments according to floor area (December 2014) Source: Dominium.pl 81-90 m² 91-100 m²m² 81-90 101-120 m²m² 91-100 over 121 m² 101-120 m² over 121 m² 71-80 m² 61-70 m² 51-60 m² SECONDARY REAL ESTATE MARKET – OFFER PRICES The year 2014 in Krakow was a stable period on the secondary real estate market in Krakow – taking into account the average offer prices, with a slight upward trend, which slowed down towards the end of the year. Thus, the disparity between the average asking price from the first and the last quarter of the period amounted to only 177 PLN. In the first quarter of 2014, in order to buy an apartment on the secondary market one had to pay an average of 6,787 PLN/m2, whereas in the fourth quarter it was 6,964 PLN/m2. This slight upward trend was a reflection of the general situation on the real estate market in Krakow, and at the same time indicates a change as compared to previous years which recorded a slight decline of the housing prices on the secondary market. (Chart 1) As a reminder, in 2013, the asking price of apartments on the secondary market fell by less than 3%, in 2012 it was 4%, in 2011 it dropped by 2.6%. This situation was influenced by several factors. Undoubtedly, one of the most important was the improvement of the economic situation on the local real estate market. This is evidenced by the record sale of residential units in the capital of Małopolska in 2014. An additional stimulus that encouraged those who were planning to buy an apartment to decide on taking a credit and making the purchase, was probably the fact that from 1st January 2014, the own contribution required from all borrowers amounted to 5%. It is not surprising, therefore, that people who do not have adequate savings, accelerated their purchasing decisions in order to complete the transaction before the beginning of 2015 (from this point, the required contribution is 10%). This situation particularly concerned people planning to buy an apartment on the secondary market. A direct impact was the fact that this particular group of buyers could not count on covering their own contribution required by the amendment to Recommendation S under the programme “Mieszkanie dla młodych”. It is worth recalling that the government programme, in contrast to its predecessor, “Rodzina na swoim”, does not include apartments from the secondary market. In 2014, persons planning to buy an apartment on the secondary market may have felt additional pressure. 0 As regards the “Mieszkanie dla młodych” programme, it should be noted that the Act on state aid in the purchase of a first apartment by young people makes the secondary real estate market beyond the interests of people who have subordinated their search for a dream apartment in order to find a dwelling qualifying for to the government funding. Therefore, in the case of this group of customers (we should also remember that buyers up to the age of 35 are the most numerous group of buyers of apartments), the secondary market does not present an attractive option. this particular area of Krakow is governed by different rules than other areas of the city. A significant part of the local offer on the secondary market are apartments located in the city centre (within the area of Planty) or in the immediate vicinity. Hence, prices in this area, due to the unusual nature of the investments themselves, as well as the prestige of the place, differ significantly from the average prices in the city. Apart from the Old Town, the most expensive districts of Krakow are Zwierzyniec and Krowodrza. The average asking prices on the secondary market in 2014 were, respectively, 8,608 and 7,749 PLN/m2. Prices remained high in the districts which are most popular among purchasers of apartments, namely Bronowice (7,613 PLN/m2), Grzegórzki (7,567 PLN/m2) and Dębniki (6,732 PLN/m2). Podgórze is also worth attention – as it is an area of Krakow which in recent years has experienced rapid development. Completed investments, not just housing investments run by developers, but also infrastructure and investments in commercial and service buildings, have made this part of the city more and more attractive for people looking for housing. Therefore, it is not surprising that as Podgórze is becoming more and more attractive, the average prices of apartments located within its boundaries are growing. In 2014, the average The year 2014 did not bring any surprises asking price of apartments on the secondary market was 6,724 PLN/m2. For comparison, in relation to the development of average in the previous year it was 6,310 PLN/m2, which is about 414 PLN/m2 less. Districts in which the average asking price remained above 6,000 PLN/m2 also included Prądnik Biały and asking prices in particular districts of the city. Prądnik Czerwony. The cost of 1 m2 on the secondary market in those parts of the city was, Invariably, the most expensive area was the Old Town district, in which the average price respectively, 6,646 and 6,531 PLN/m2. Invariably, the cheapest areas were districts located of apartments on offer was 9,167 PLN/m2. in the eastern part of Krakow: Wzgórza Krzesławickie (5,300 PLN/m2), Prokocim-Bieżanów III.2.1-1 However, it is worth remembering that (5,557 PLN/m2), Bieńczyce (5,567 PLN/m2) and Mistrzejowice (5,721 PLN/m2). (Chart 2) Chart 1. The average asking price of apartments on the secondary market in each quarter of 2014 Source: Data from KRN.pl 6,900 6,950 7,000 7,050 PLN/m2 6,700 6,750 6,950 7,000 7,050 Q3 III.2.1-2 Q4 PLN/m2 1,000 2,000 Bieńczyce (XVI) Mistrzejowice (XV) Podgórze Duchackie (XI) Swoszowice (X) Czyżyny (XIV) Łagiewniki-Borek Fałęcki (IX) Prądnik Czerwony (III) Prądnik Biały (IV) Podgórze (XIII) Source: Data from KRN.pl 6,900 Q2 Bieżanów-Prokocim (XII) The average asking price of apartments on the secondary market in the districts of Krakow. 6,850 Q1 Wzgórza Krzesławickie (XVII) Chart 2. 6,800 Dębniki (VIII) Grzegórzki (II) Bronowice (VI) Krowodrza (V) Zwierzyniec (VII) Stare Miasto (I) III.2.1-3 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Dębniki (VIII) Prądnik Biały (IV) Krowodrza (V) Podgórze Duchackie (XI) PLN/m2 1,000 2,000 4,000 3,000 6,000 5,000 7,000 Prądnik Czerwony (III) 8,000 Chart 3. III.2.1-3 The average asking Podgórze (XIII) price of apartments Grzegórzki (II) on the secondary market Bieżanów-Prokocim (XII) taking into account Mistrzejowice (XV) the year of construction III.2.1-4 before1960 1961-1989 2 Source: Data from KRN.pl PLN/m 1 000 1990-2010 % 2 4 6 10 8 12 12.0% 11.5% Dębniki (VIII) 1990-2010 Łagiewniki-Borek Fałęcki (IX) Wzgórza Krzesławickie (XVII) 6.6% 6.2% Prądnik Czerwony (III) 6.0% Podgórze (XIII) 5.8% Grzegórzki (II) 5.6% Bieżanów-Prokocim (XII) 4.9% Mistrzejowice (XV) 4.5% Nowa Huta (XVIII) 4.0% Zwierzyniec (VII) III.2.1-5 Czyżyny (XV) 3.6% Chart 4. 3.0% Bieńczyce (XVI) The supply of apartments on the secondary market in particular districts of Krakow (%) 3.0% Bronowice (VI) 2.0% Swoszowice (X) 1.8% Łagiewniki-Borek Fałęcki (IX) Wzgórza 2 PLN/m 1,000Krzesławickie 2,000(XVII) 3,000 0.7% 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Source: Data from KRN.pl III.2.1-5 Housing prices on the secondary market in Krakow largely depended on the year facility. In 2014, buildings built before 1960 were the most expensive. Bieżanów-Prokocim This is mainly (XII) due to the fact that these are largely historic buildings located in the city Bieńczyce centre.(XVI) Last year the average price of units in this segment was 6,935 PLN/m2. It should Mistrzejowice be noted,(XV) however, that the analysis does not include the most expensive apartments, Podgórze Duchackie whose prices (XI) exceeded the amount of 10,000 PLN/m2. Taking into account the year of construction, the most affordable housing in 2014, were apartments in buildings Swoszowice (X) constructed in the years 1961-1989. This results from the fact that these are largely units Czyżyny (XIV) located in buildings Łagiewniki-Borek Fałęcki (IX)constructed according to the large panel technology, which is not very popular among Prądnik Czerwony (III) buyers. Moreover, often these are units located in large blocks of flats, outside of the centre of Krakow. The average price of apartments in this segment in 2014 Prądnik Biały (IV) amounted to 6,145 PLN/m2. (Chart 3) Wzgórza Krzesławickie of the (XVII) of construction Podgórze (XIII) Dębniki (VIII) Supply of apartments In 2014, the largest number of apartments for sale on the secondary market was recorded Bronowice (VI) in the following districts: Old Town (12%), Dębniki (11.5%) and Prądnik Biały (10.8%). Krowodrza (V) These are areas in which the supply of housing on the secondary market has been Zwierzyniec (VII) the largest for several years. These areas of the city were also leaders in terms of supply Stare Miasto (I) in both 2013 and 2012. Grzegórzki (II) At the other extreme were: Wzgórza Krzesławickie (0.7%), Łagiewniki-Borek Fałęcki (1.8%) and Swoszowice (2%). The low supply of apartments on the secondary market in those parts of Krakow results from the fact that the said areas are characterized by a low level of multifamily housing – they are largely dominated by single-family housing. (Chart 4) 2 rooms 39% 3 rooms 32% 1 room 15.5% 4 rooms and more 13.5% Chart 5. The supply of apartments in Krakow according to the number of rooms Source: Data from KRN.pl By far the largest part of the offer on the secondary market in the capital of Małopolska are 2-room apartments. In 2014, apartments offered in this group accounted for 39% of the III.2.1-4total offer. Second were 3-room apartments (32%). The smallest choice was offered to persons planning to buy a studio flat or a 4-room apartment or bigger. In 2014, such apartments accounted for, respectively, 13.5 and 15.5% of the total offer on the secondary market in Krakow. (Chart 5) % Stare Miasto (I) Dębniki (VIII) 2 4 6 8 10 12 14 12.0% 11.5% 5 000 Bronowice (VI) Swoszowice (X) 8.0% Krowodrza (V) Podgórze Duchackie (XI) III.2.1-2 4 000 Bieńczyce (XVI) 1961-1989 10.8% Prądnik Biały (IV) 3 000 Zwierzyniec (VII) Czyżyny (XV) 14 przed 1960 Stare Miasto (I) Nowa Huta (XVIII) 2 000 0 2.0 1.8% 0.7% THE SECONDARY REAL ESTATE MARKET – TRANSACTION PRICES Most apartments in the Krakow secondary market are sold in the largest cadastral unit – Podgórze. For many years, nearly half of all the apartments completed by developers have been built in this old district, which in time supply the offer of the secondary market, increasing the volume of transactions in this market segment. The smallest number of apartments is sold in the following areas: the city centre – because of the high prices – and Nowa Huta, with the lowest number of constructed apartments. The bad reputation of Nowa Huta still discourages potential buyers from buying an apartment in this part of the city, despite a significant number of housing built in the 1950s and 60s. (Chart 1) After a very good 2013, when almost as many apartments were sold as during the exceptionally good performance in the years 2010-2011, in 2014 the number of apartments sold in the secondary real estate market declined significantly: by 8% as compared to the previous year. This is a result of competition from the primary market, which last year supplied the housing market with a significant number of new investments and became highly competitive for the secondary market in terms of prices. The difference between the average selling price of a new and second-hand apartment was an average of 500 PLN/m2, which meant that by adding approx. 8% of the purchase price, as compared to apartments on the secondary market, buyers could afford a new apartment with similar surface area and location. III.2.2-1 III.2.2-2 1,200 9,000 8,000 1,000 7,000 6,000 Chart 1. 800 5,000 The volume of transactions 4,000 on the secondary market 3,000 600 .2.2-2 Source: Instytut Analiz Monitor 2,000 Rynku Nieruchomości – mrn.pl 1,000 * numbers estimated on the 400 2008 2009 2010 2011 2012 2013 2014* basis of incompletePLN data 2008 Podgórze Krowodrza Nowa Huta 2009 2010 Śródmieście 9,000 8,000 7,000 6,000 Chart 2. 5,000 III.2.2-4 The average price per 1 m2 of an apartment on the secondary market 4,000 III.2.2-33,000 2,000 1,000 PLN m2 40 2008 2005 45 2009 Śródmieście 2006 2010 Krowodrza 50 2011 2012 Podgórze 55 2013 2014* Nowa Huta Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl million PLN * numbers estimated on the 600 700 basis of incomplete data 2010 2011 2007 2012 2008 2013 The decline in the number of apartments sold on the secondary market was also the result of the state policy of subsidizing the young members of the society with the purchase 2009 of new apartments – under the government programme “Mieszkanie dla młodych” (MdM) 2010 III.2.2-4 – at least 10% of the price in the case of cheap construction, which covered the difference 2011 in value between new and old apartments, favouring the former. 2014* 2012 2013 The assessment of the attractiveness of particular areas of Krakow is reflected in the 600 obtained for millionaverage PLN 800 in the former900 700residential units prices four districts. 1,000 The greatest 1,100 interest, 2014* and consequently – the highest prices, are recorded in the city centre and Krowodrza. Lower prices are achieved in Podgórze, and, traditionally, the cheapest is Nowa Huta. (Chart 2) 2010 2011In 2014 there was a rebound of transaction prices. Prices in all the districts increased to 2013. However, the scale of increase was small, barely noticeable. 2012as compared 2013 The 2014* year 2014 was the third, in recent years, when the average price of the purchased units, despite the growth, remained below the limit of 300 thousand PLN for the average unit. The average unit price per 1 m2 of the total number of sold apartments in the secondary market, in 2014, increased by approx. 2% as compared to the previous year, but still below 6 thousand PLN/m2. A slight growth was recorded in all areas of the city, but in a different dimensions. Prices in downtown areas and Krowodrza increased, while in Podgórze and Nowa Huta the increase in average prices was barely noticeable. In total, with respect to the entire city, the average size of apartments purchased on the secondary market, in 2014, was as in the previous year: 49 m2. This reflects the high purchasing power of buyers, while maintaining low prices. As in previous years, mostly small apartments were traded on the secondary market. Larger units are rarely traded on the market. In 2014, transactions of apartments with a floor area of 65 m2 accounted for 14% of all transactions and the sale of apartments of over 100 m2 was slightly more than 2% of the total market. 11 800 This situation has lasted for a long time and will be difficult to change, as, currently, mainly small apartments are being built, which in time will enter the secondary market, causing the continuation of current trends. (Chart 3) The decline in the number of transactions on the secondary market in 2014 resulted in smaller turnover, which fell to its lowest level in 8 years. The beneficiary of the increased demand for housing in Krakow was the primary market, which in 2014 sold more than two times more apartments than the secondary market. Never before in the history of the real estate market III.2.2-1 in Krakow, this relationship was so unfavourable for the secondary market. (Chart 4) Summary The highest 1 200 ever domestic demand for housing was recorded, however, in Krakow it focused on the primary market. The secondary market recorded the lowest turnover in 8 years. 1 000 All the districts sold mainly small apartments, wealthier customers preferred the primary market. 800 The government programme “Mieszkanie dla młodych” with subsidies for new housing and increased600 competition on the development market resulted in poor sales in the secondary market. These factors will continue to drive the market in 2015. Despite the poor sales, 400 to 2013, there was a slight increase in the prices of second-hand apartments: as compared 2008expensive 2009 2010 and barely 2011 noticeable 2012in the cheaper 2013 parts 2014* more visible in more neighbourhoods of the city. III.2.2-2 In 2015, the secondary real estate market in Krakow should be stable as regards prices. Barriers to the growth of prices are too strong to result in a visible appreciation of the current price levels. III.2.2-3 9,000 8,000 m2 7,000 40 6,000 45 50 55 5,000 2011 2012 2013 2014* Chart 3. 4,000 2005 3,000 2006 2,000 2007 1,000 2008 PLN The average floor area of an apartment on the secondary market in Krakow 2009 Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl 2012 * numbers estimated on the basis of incomplete data 2008 2009 2010 2011 2012 2013 2014* 2010 2011 2013 2014* III.2.2-4 50 55 million PLN Chart 4. Trading on the secondary real estate market Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl * numbers estimated on the basis of incomplete data 2010 2011 2012 2013 2014* 600 700 800 900 1,000 1,100 II RENTAL OF APARTMENTS AND HOUSES For years the housing rental market in Krakow has been characterized by stable prices. Slight fluctuations occur during the holiday season, when demand from potential tenants (in Krakow this group is mainly composed of students) is limited. After excluding seasonal factors, it turns out that the rates for renting an apartment in Krakow in 2014 – as in previous years – remained stable. This confirms the fact that the lease in the capital of Małopolska is stable and remains less susceptible to changes in the market. Significantly, in 2014, there have been no major differences as compared to previous years. The cost of renting the most popular 2-room apartment was an average of 1,420 PLN. For comparison, in 2013 it was 1,466 PLN. The tenants of studio flats in 2014 had to take into account a cost of 1,069 PLN. For obvious reasons, the most expensive apartments were 3- and 4-room apartments. These are units with a larger floor area, and in the case of the latter group – often of a higher standard, located in the central parts of the city, which are considered the most attractive. The cost of renting such an apartment in 2014 in Krakow, was, respectively, 1,678 and 2,201 PLN. (Chart 1) The stability of rental prices of apartments in Krakow is confirmed by the analysis of the average rates in each quarter of 2014, taking into account the number of rooms. A noticeable decrease in prices was recorded only in the third quarter of the year, as regards all apartments included in the analysis. This results from the fact that the third quarter of the year is the holiday season, a time when the largest group of tenants, namely students, is out of town. During this period, landlords are willing to lower rental rates, to find tenants for that period. The prospect of reduced revenues from the lease is in fact more favourable to them than the option that for three months the apartment is non-rented. The tendency to reduce prices also results from the fact that in addition to losses caused by the fact that tenants do not pay the so-called cancellation fee, the owners are aware of the fixed costs for the said period, which include, among other things, administrative fees. After a period of lower demand for apartments for rent in the summer season, in the fourth quarter of 2014, the situation on the rental market returned to normal, and prices reached the pre-holiday period. (Chart 2) 13 An important criterion determining the level of average prices for renting apartments in Krakow is location. As it turns out, the average rental rates in different administrative areas of Krakow differ by as much as a few hundred PLN. The most expensive apartments are located in the central parts of the city. These include: the Old Town, Zwierzyniec and Grzegórzki. In the former, the average price for the rental of an apartment in the reported period amounted to PLN 1,721, which means that it was about 54 PLN higher than in the previous year. In Zwierzyniec, a district that came second in the ranking, tenants paid an average of 1,645 PLN. In Grzegórzki the price amounted to PLN 1,587. The most expensive districts, taking into account the average rental price, include Bronowice (1,505 PLN), Krowodrza (1,502 PLN) and Dębniki (1,425 PLN). It is worth noting that relatively high rates for rental are in areas popular among students. This group includes Dębniki, where a large number of faculties of the Jagiellonian University are located or Bronowice. (Chart 3) The analysis of the supply of apartments for rent indicates that in 2014 the largest number of units appeared in the district of Prądnik Biały. Apartments for lease located in this district accounted for over 13% of the total offer in 2014. In second place, in terms of supply, was Krowodrza (12%), and the third – Dębniki (11.8%). A good result was also recorded in such administrative parts of the city as Prądnik Czerwony (9%) and the Old Town (8.8%). At the opposite extreme, with the lowest number of units for rent in 2014, were areas farthest from the centre of the city – Wzgórza Krzesławickie, Swoszowice and ŁagiewnikiBorek Fałęcki. It is worth noting that these are areas with a small number of multi-family housing – they are dominated by single-family houses. (Chart 4) III.3-1 PLN/month Chart 1. 1 room The average rental prices in 2014 2 rooms Source: Data from KRN.pl 4 rooms 500 1,000 1,500 2,500 2,000 3 rooms 2,500 1,500 2,000 2,500 Chart 2. Changes in average rental prices, taking into account the number of rooms in each quarter of 2014 Source: Data from KRN.pl 2,000 1,500 1,000 500 PLN Q1 Q2 4 rooms 3 rooms Q3 2 rooms Q4 1 room III.3-3 PLN/month Stare Miasto (I) Zwierzyniec (VII) 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Prą 2 500 2 500 2 000 PLN/month 1 500 200 400 800 600 1,000 1,200 1,400 1,600 1,800 % 2 4 1 000 Stare Miasto (I) Prądnik Biały (IV) 500 Zwierzyniec (VII) Krowodrza (V) Grzegórzki (II) PLN Dębniki (VIII) I kwartał Bronowice (VI) II kwartał III kwartał IV kwartał Prądnik Czerwony (III) Krowodrza (V) Stare Miasto (I) Dębniki (VIII) Grzegórzki (II) Prądnik Czerwony (III) Podgórze (XIII) Podgórze (XIII) Bronowice (VI) Prądnik Biały (IV) Podgórze Duchackie (XI) Czyżyny (XIV) Mistrzejowice (XV) Podgórze Duchackie (XI) Bieżanów-Prokocim (XII) Bieżanów-Prokocim (XII) Nowa Huta (XVIII) Swoszowice (X) Czyżyny (XIV) Łagiewniki-Borek Fałęcki (IX) Zwierzyniec (VII) Chart 3. Wzgórza Krzesławickie (XVII) Bieńczyce (XVI) The average rental Łagiewniki-Borek Fałęcki (IX) prices for apartments divided into districts Swoszowice (X) Bieńczyce (XVI) Nowa Huta (XVIII) Mistrzejowice (XV) Source: Data from KRN.pl Wzgórza Krzesławickie (XVII) III.3-4 % 2 4 6 8 10 12 14 16 III.3-5 III.3-6 Prądnik Biały (IV) Krowodrza (V) Dębniki (VIII) Prądnik Czerwony (III) PLN/month 500 Stare Miasto (I) Grzegórzki (II) Podgórze (XIII) Krakow Bronowice (VI) Wieliczka County Krakow County Podgórze Duchackie (XI) Mistrzejowice (XV) Bieżanów-Prokocim (XII) Nowa Huta (XVIII) Czyżyny (XIV) Zwierzyniec (VII) Chart 4. Bieńczyce (XVI) The supply of apartments for rent in particular districts in 2014 Łagiewniki-Borek Fałęcki (IX) Swoszowice (X) Wzgórza Krzesławickie (XVII) Source: Data from KRN.pl III.3-6 15 1,00 1,200 Bronowice (VI) Prądnik Biały (IV) Podgórze Duchackie (XI) Czyżyny (XIV) Podgórze Duchackie (XI) Bieżanów-Prokocim (XII) Swoszowice (X) Łagiewniki-Borek Fałęcki (IX) Wzgórza Krzesławickie (XVII) Bieńczyce (XVI) 1,400 1,600 1,800 Nowa Huta (XVIII) Mistrzejowice (XV) Mistrzejowice (XV) Bieżanów-Prokocim (XII) As in previous years, the largest group of apartments offered for rent in Krakow were 2-room apartments. The analysis of the structure of supply indicates that in 2014 such units Nowa Huta (XVIII) constitutedIII.3-4 almost half of the offer – 48%. In second place, but with a significantly poorer Czyżyny (XIV) result (26%), were studio flats. There were also fewer 3-room apartments (23%) in the Zwierzyniec (VII) Krakow offer. Persons who wanted to rent a 4-room apartment had the greatest difficulties. Bieńczyce (XVI) Apartments in this segment accounted for only 2% of all apartments offered for rent in Łagiewniki-Borek Fałęcki (IX) 2014. Apartments with more than 4 rooms were not included in the analysis of the structure Swoszowice (X) % 8 2 14 4 12 6 16 10 of supply, as their share in the total number of ads was only 1%. (Chart 5) Wzgórza Krzesławickie (XVII) The year 2014 was also a stable period for those renting homes in Krakow, as well as in the county of Krakow and Wieliczka. After the cuts of rental rates of this type of property Krowodrza (V) reported in previous years, in 2014, we witnessed a stabilization of prices, and in some Dębniki (VIII) cases – their slight increase. The average price for renting a house in Krakow in the said Prądnik Czerwony (III) period was approx. 3,564 PLN, i.e. only 40 PLN more than in 2013. Small changes in the Stare Miastoaverage (I) rental rates (year on year) were also reported in the case of houses located outside – in the county of Wieliczka and Krakow. In the first case, the average rent was Grzegórzki of Krakow (II) 2,420 PLN, i.e. 3.5% more than in the previous year. Whereas tenants renting houses in Podgórze (XIII) III.3-5 the county of Krakow, in 2014, had to take into the account a cost of approx. 2,398 PLN. Bronowice (VI) This is an increase as compared to 2013, in which this amount was 2,349 PLN. (Chart 6) Prądnik Biały (IV) Podgórze Duchackie (XI) Mistrzejowice (XV) Bieżanów-Prokocim (XII) PL Nowa Huta (XVIII) Czyżyny (XIV) Zwierzyniec (VII) Bieńczyce (XVI) Łagiewniki-Borek Fałęcki (IX) Chart 5. Swoszowice (X) The supply of Wzgórza Krzesławickie (XVII) apartments for rent, taking into account the number of rooms in 2014 Source: Data from KRN.pl 2 rooms 48% 1 room 26% 3 rooms 23% 4 rooms 2% other 1% III.3-6 PLN/month 500 Chart 6. The rates for renting a house in the county of Krakow and Wieliczka in 2014 Krakow Source: Data from KRN.pl Krakow County Wieliczka County 1,000 1,500 2,000 2,500 3,000 3,500 4,000 TENEMENT HOUSES AND HISTORIC AREAS The pre-war and historic centre of Krakow is built up with tenement houses – multistorey residential buildings which dominated the cities of the Middle Ages to the midtwentieth century. Urban complexes of tenement houses include the oldest part of the city centre, Krowodrza and Podgórze. These are considered the best locations in Krakow, generating the highest revenues from rents and services (trade, tourism and catering), and their unique form is a source of prestige for the owners of such buildings. Therefore, tenement houses have always been a separate segment of the investment property market, with its own dynamics, supply and demand. The market of tenement houses is strongly correlated with the housing market (especially apartments), as well as the commercial space market and the hotel and tourism market, which most often operate in these buildings. Turnover Every year, transactions concerning tenement houses in all three pre-war Krakow districts: the city centre, Krowodrza and Podgórze are recorded. In 2014, there were 33 sale transactions of entire tenement houses and 128 transactions of shares. After a period of decline in the number of transactions taking place since the peak in 2006-2009, the number of purchasesale contracts grew rapidly in the period 2010-2013. In the previous year, the volume of transactions of whole tenement houses rose again, reflecting the continuing very good economic performance of the market. (Chart 1) The year 2013 was a record year in terms of turnover – such results were have not been recorded on the market since 2009, and 2014 was very similar. Investors spent up to 200 million PLN on purchases, including the purchase of whole buildings – over 130 million PLN. The year 2014 was a continuation of the growing interest in investing in historic Krakow real estate, sustained by the good economic performance in the apartments market. The specific feature of this type of market segment is flexible, variable demand adapted to the economic situation, as compared to the relatively rigid supply of sale offers of historic buildings. 17 III.4-1 Similarly to the residential, commercial and hotel market, also the market of tenement houses has displayed investor optimism 2003 since mid-2013, as reflected by public auctions of municipal tenements in which 2004 up to 20 bidders have participated since 2005 the holiday season of 2013. 0 2006 Prices The years 2003-2007 witnessed a rapid2007 increase in the prices of tenement houses 2008 due to the boom in the real estate market 2009 at that time. In 2008, the adjustment began and prices started to fall until 2012. The last 2010 two years have been a period of stability, comparable to the level from 2010 and 2011 2011 (6,800-7,100 PLN/m2 of usable floor 2012 area of a tenement house in the city centre). Taking into account the simultaneous 2013 50 100 150 200 250 increase in the number of transactions, it may mean that the market has already reached its lowest price level in 2012, and since then the downward trend has been replaced by an upward trend. Current prices of tenement houses are still lower by 30% (nominal prices), and after taking into account the inflation, by almost 40% (real prices), from record prices in 2007. The highest price paid so far, in 2014, for a tenement house was 15.5 million PLN, with an average market price of such properties of approx. 4.4 million PLN. For comparison, in 2013 the most expensive house reached a price of 25.3 million PLN, and the average market price of the property amounted to PLN 5.3 million. An inherent feature of the market is a considerable variation of unit prices of tenement houses (2.3 thousand – 12 thousand PLN/m2 of usable floor area) resulting from significant disparities in the attractiveness of the location (Węgierska Street in Podgórze – Main Market Square), in their technical condition (from luxury townhouses – to vacant buildings III.4-1 requiring an overhaul) and the size of the income from the lease (from retail space rented for 300-400 PLN/m2 – to apartments with tenants paying adjustable rent 10-14 PLN/m2). 0 investors, the50expected rate of return 100 150 for calculating200 For most is the basis the cost-effective250 price of purchasing the building. 2003 2014* III.4-1 2004 2005 0 50 100 150 200 250 2006 2007 2003 2008 2004 III.4-3 2009 2005 2010 2006 Chart 1. 10 Number of transactions9 on the market 8 of tenement houses 7 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl * estimated on the basis of incomplete data 6 2011 2007 2012 2008 2013 2009 5 2014* 2010 4 2011 3 Number of transactions of whole tenement 2 houses 1 Number of transactions thousand of interests PLN in tenement houses 2012 2013 2014* 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* III.4-3 10 9 8 Chart 2. The average price of 1 m2 of usable floor area in the city centre Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl * estimated on the basis of incomplete data 7 III.4-3 6 5 4 10 3 9 2 8 1 7 thousand 6 PLN 5 4 3 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* III.4-2 million PLN 50 100 150 200 250 300 350 400 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* Chart 3. Market turnover in tenements and interests in tenements Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl * estimated on the basis of incomplete data Market turnover of whole tenement houses (million PLN) Market turnover of interests in tenement houses (million PLN) Demand Foreign demand increased during the bull market up to 2007. For example, in Kazimierz, the share of foreign investors (mainly from the EU and Israel) in the market turnover increased from 13% in 2003 to 75% in 2008. Since 2009, their interest in tenement houses started to decline. Currently, the share of foreign capital does not exceed 40%. The structure of demand in 2014 still indicates a majority of investors in the housing and apartment sector, and a limited, but steady, demand from the hotel and tourism market (purchases for hotels, hostels, guest houses, catering facilities). The demand pressure has also been growing in the case of investors looking for townhouses for distinctive offices and corporate headquarters. The investment attractiveness of townhouses is also reflected in new investments in the city centre – the so-called infills (supplement buildings between existing houses). Prognosis Since mid-2013, investors encouraged by low prices and cheaper loans are slowly returning to the market. In addition, from the beginning of 2014, the market of tenement houses has been affected by an upturn in the market of luxury apartments. Therefore, market forecasts for tenement houses in Krakow in the short and medium term are optimistic. In the near future, new domestic and foreign capital will continue to flow, attracted by the good “brand” of Krakow as the tourist capital of Poland, and more recently as an international centre of business and science. Developers of the housing sector and the tourism industry, thanks to whom the historic properties have regained their former glory, are the future of the market. 19 SINGLE FAMILY HOUSING IN KRAKOW The primary market In comparison to previous years, the analysis of the primary market indicates that a decline in turnover is still visible in this segment of the market. The high activity of developers in the real estate market limits the development of projects in the segment of single-family housing. The market situation is deteriorating from year to year. Houses – because of the costs – are sold directly by developers. Since 2012 there has been a clear decline in trading volumes and the number of transactions. In 2012, 90 transactions were recorded, which was a significant and surprising growth in comparison to 2011, which recorded 69 transactions. By contrast, in 2013 the number of transactions fell to 75 and it seems 65 170 60 165 55 160 that the decline will continue in 2014. The estimated number of transactions in 2014 was 51, with a decrease in turnover from over 44 million PLN to 35 million PLN. This means a decrease in turnover by 20%. After a significant increase in turnover in 2012, we are dealing with a continuing downward trend. (Chart 1) There is a strong variation in the activity of developers, as divided into the old districts of Krakow. In the last 3 years, there was 1 real estate development in the city centre, with minimum activity in Nowa Huta – although in the last two years there have been a few transactions recorded. As usual, developers have showed the highest activity in Podgórze, where the volume of sales was more than two times higher than in other districts in total. 65 170 800 60 165 700 6,000 5,000 55 160 600 50 155 500 45 150 400 40 145 300 4,000 50 155 45 150 40 145 35 140 3,000 2,000 35 140 200 30 135 100 million PLN m2 thousand PLN Chart 1. Turnover and the average size of a single-family house in Krakow 300 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl 250 200 * estimated on the basis of incomplete data The average transaction prices and the average price for 1 m2 of usable floor area Source: Instytut Analiz Monitor 140 120 100 150 80 100 60 Rynku Nieruchomości mrn.pl * estimated on the basis of incomplete data 140 120 100 80 60 Average transation price (thousand PLN) Average price of 1 m2 usable floor area 2013 2014* 2012 2011 2009 PLN/m2 2010 2013 2014* 2012 2011 2009 Chart 2. Turnover (million PLN) Average usable floor area (m2) 2010 2014* 2013 m2 2012 million PLN 2011 135 2010 30 2009 2014* 2013 2012 2011 2010 2009 1,000 200 1,000 300 140 100 250 120 thousand PLN Chart 3. PLN/m2 2013 100 Source: Instytut Analiz Monitor 40 mrn.pl Rynku Nieruchomości 50 thousand PLN 100 80 Number of transactions of houses in Krakow 60 2014* 2012 2011 2009 150 2010 200 * estimated on the basis 20 of incomplete data 2004 2005 2006 Podgórze 2007 2008 Krowodrza 2009 2010 2011 Nowa Huta 2012 2013 million PLN 2014* 2004 2005 2006 2007 Śródmieście 1,600 140 1,400 120 1,200 % 100 1,000 5 10 15 <3 800 80 Chart 4. 600 60 Total turnover 4-5 of houses in Krakow 5-6 400 40 200 20 thousand million PLN 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* PLN 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* Podgórze Krowodrza Śródmieście 3-4 11% Source: Instytut Analiz Monitor Rynku Nieruchomości6-7 mrn.pl 7% * estimated on the basis 7-8 4% of incomplete data 8-9 9-10 Nowa Huta 5% 1% 10-11 0% % 5 10 15 20 25 30 35 The average transaction prices in 2013 fell by 14%, which could be due to the sale of buildings in stages less advanced than the developer stage and it seems that in 2014 <3 35% the average prices will rise, and the expected decline in the period of two years will amount 2 18% 3-4 to 6%. The average price of 1 m of usable floor area within 2 years will fall by 10%, while increasing the usable floor area of houses by 10%. 4-5 17% The average area of a single-family 2 house 5-6sold in the development market 11% in 2014 amounted to 161 m and has not changed since6-7 2013. Prices ranged from 300 thousand to 2 million PLN for the property. (Chart 2) 7% 7-8 4% The secondary market 8-9 5% The year 2014 did not record a recovery on the secondary market of houses in Krakow. 9-10 1% number of transactions remained at a level similar to 2013. Every year in The estimated 10-11 0% Krakow, little over two hundred houses are sold, which is less than 50% of the transactions made in the 1% period of growth (2005-2007). (Chart 3) 11-12 >12 2008 40 11-12 1% >12 for a house 1% The average price on the secondarythousand market continues to decline. PLN/m2 (2008) it was approx. In the best period 1 million PLN. Currently, on average, a real estate built up with a single family house on the secondary market costs slightly more than 700 thousand PLN. (Chart 5) The continuing crisis is best illustrated by Chart 6. In 2014, for the first time, the highest number of transactions of houses with prices below 3 thousand PLN/m2 was recorded. 1% 2014 was yet another year in which turnover decreased, and the fourth in a row in which thousand PLN/m2 failed to exceed 200 million PLN. As in previous years, by far the highest turnover turnover was recorded in Krowodrza and Podgórze. Most transactions are concluded in Podgórze, and the most expensive homes are sold in Krowodrza. (Chart 4) 21 145 40 170 155 45 150 40 145 35 140 2014* 50 2013 160 2012 55 2011 165 2010 60 6,000 Summary 140 35 In the primary market segment of single-family housing in the area of Krakow in 2014, 700 5,000 a further decrease in turnover and number of transactions was observed. The average size 135 30 price of the sold house increased. Further decrease in the unit indicates that the market 600 by competition from single-family houses of single-family houses is still strongly affected built outside Krakow and tries to be competitive in million relation to the prices of apartments in the m2 PLN 4,000 area of Krakow. The diminishing area of plots for single-family houses confirms the need to 500 maintain the price as low as possible. 2009 65 800 In 2014, there have been no signs of recovery on the secondary market of single-family 400 3,000 houses. The prices of houses are still high, which is an effective barrier for buyers. The home market outside Krakow (in neighbouring municipalities) continues to be very competitive. The average price for a house on the secondary market in Krakow 300 is 700 thousand PLN. Such an amount outside Krakow 2,000 allows to build or purchase a new 2 house with an area of 150-200 m . The secondary house market is a market with limited 300 supply. The number of houses built in Krakow 200 is small, and in the near future they will not appear in the offer of the secondary market and therefore, fail to cause a recovery. 250 1,000 200 PLN thousand PLN 2004 2005 2006 PLN/m2 2014* 50 2013 100 2012 m2 2011 million PLN 2009 135 2010 30 At the moment, it seems that the factors 100 that could cause the revival of this market are macroeconomic factors, and these – as everyone knows – do not encourage to make 150 decisions about buying expensive properties. thousand 2007 2008 2009 2010 2011 2012 2013 2014* 1,600 1,400 Chart 5. The average price for a house on the secondary market Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl * estimated on the basis of incomplete data 1,200 140 1,000 120800 100600 80400 200 60 thousand PLN 40 2004 20 009 2010 2011 2012 2013 2014* million PLN 2005 2006 Śródmieście 2004 % 2005 2007 2008 2009 Krowodrza 2006 5 2007 10 2008 2009 20 <3 17% 5-6 11% 6-7 7% 7-8 2011 2012 2013 2014* Chart 6. The share of transactions in houses in particular price ranges in 2014 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl 4% 8-9 9-10 5% 1% 10-11 0% 11-12 1% >12 1% thousand PLN/m2 2010 2012 2013 Nowa Huta 2011 25 2012 30 2014* Average 2013 2014* 35 40 35% 18% 4-5 2010 2011 Podgórze 15 3-4 2009 2010 SINGLE-FAMILY HOUSES IN THE SUBURBAN AREA OF KRAKOW The year 2014 on the market of singlefamily houses in the county of Krakow, in terms of the number of transactions, was very similar to 2013 – in the last two years, this value has stabilized, slightly exceeding 600 purchase agreements. Still, market activity is much lower than in the record year of 2009 (692 transactions). As compared to 2013, the trading volume has slightly decreased. This means less money paid for a single property. (Chart 1) Data from 2014, presented on the following charts, was approximated due to the lack of data from all regions. Trend lines generated for a wide interval in the county of Krakow indicate a stabilization in 2015. the increase between 2013 and 2014 was 28% and increase in terms of the volume of trading amounted to 37% year on year. The analysis of the trend line for the county of Wieliczka shows a sustained upward trend, both in the number of transactions and the trading volume. (Chart 2) In 2014, the largest number of transactions of single-family houses was recorded in the municipalities of Zielonki, Zabierzów and Mogilany. When comparing data from 2013, it is worth paying attention to a significant increase in the number of transactions in the municipalities of Liszki and KocmyrzówLuborzyca and a decrease – in Mogilany and Zabierzów. Data covering transactions from the county of Wieliczka indicates significant recovery – in terms of the number of transactions, 23 thousand PLN 0 thousand PLN 100 200 300 400 500 600 700 800 0 Krakow district Wieliczka district 10,000 and20 The average transaction price for a house in the municipalities of the county of Krakow Wieliczka 10,000 10,000 20 2011 2012 2013 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl 5,000 III.5.2-5 5,000 5,000 thousand 0 thousand 0 thousand PLN PLN PLN 800 Krakow district Wieliczka district 50 Wieliczka – municipality 40,000 35,000 30,000 Wieliczka – town 250 250 400 400 200 200 300 300 150 150 200 200 100 100 45,000 80 50,000 120 100 100 45,000 50 50 100 40,000 million 0 PLN 35,000 80 60 50,000 45,000 15,000 100 2014 2013 2012 2011 2010 2009 2008 2007 400 Number III.5.2-4of 25,000 transactions Trading 20,000 Trend line 15,000 Trend trading 10,000 1205,000 80 60 20,000 2014 2013 2012 2011 500 100 40 15,000 20 2014 5,000 0 thousand PLN Wieliczka – town 25,000 Wieliczka – municipality Niepołomice – town Niepołomice – municipality Kłaj 2006 2005 2004 2003 III.5.2-2 350 150 ieliczka – town 100 Gdów 2007 2003 2008 2004 2009 2005 2010 2006 2011 2007 2012 2008 2013 2009 2014 2010 2006 2005 300 III.5.2-4 a – municipality Krakow district 350 Wieliczka – town 800 Wieliczka – municipality 500 400 ołomice – town 600 Niepołomice – town 15,000 liczka – town e – municipality 15,000 40 Niepołomice – town 20,000 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl Niepołomice – municipality 40 III.5.2-4 The number of transactions and trading of houses in the county of Wieliczka Niepołomice – municipality 20,000 Chart 2. municipality Kłaj 25,000 25,000 Kłaj 60 60 mice – town Gdów 30,000 30,000 Gdów 35,000 80 municipality Biskupice 40,000 45,000 thousand 0 PLN 40,000 80 35,000 Niepołomice – town Biskupice Wieliczka – municipality Gdów Wieliczka – town Kłaj 45,000 100 Niepołomice – municipality 1005,000 20 50,000 Biskupice 10,000 2004 III.5.2-2 Kłaj Zielonki Trend trading Biskupice 15,000 Zabierzów Gdów Trend line 40 Kłaj 20,000 Gdów Trading Zielonki 25,000 Wielka Wieś Biskupice 30,000 2003 700 Zabierzów 50,000 Biskupice Number of transactions Wielka Wieś 700 35,000 Zielonki Świątniki Górne Chart 3. 40,000 Świątniki Górne 0 million PLN Zabierzów Sułoszowa 300 50,000 Sułoszowa 500 Słomniki 600 Zielonki 100 600 Skawina 100 800 Skała 200 Zielonki 200 800 0 million PLN 700 Zabierzów 100 Mogilany 300 Zabierzów 2014 2013 2012 2011 100 Wielka Wieś 300 Wielka Wieś 400 2014 2013 400 Świątniki Górne 0 million PLN 2012 600 Michałowice 2011 500 Świątniki Górne Sułoszowa Słomniki Skawina Skała Mogilany 500 Liszki Krzeszowice Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Iwanowice 2010 2009 2008 2007 2006 2005 2004 2003 200 Wielka Wieś Słomniki III.5.2-6 200 iątniki Górne Skawina 200 Michałowice Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl 300 Sułoszowa Skała 400 Liszki The number of transactions and III.5.2-3 trading of houses in the county of Krakow 300 Słomniki Mogilany 500 Igołomia-Wawrzeńczyce Chart 1. 400 Skawina Michałowice 300 Krzeszowice III.5.2-3 700 Skała Liszki 400 Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Iwanowice 2007 2003 2008 2004 2009 2005 2010 2006 2011 2007 2012 2008 2013 2009 2014 2010 2006 2005 600 800 Mogilany Krzeszowice 500 700 Michałowice zów-Luborzyca 600 800 Liszki wice-Przeginia 600 Krzeszowice Iwanowice thousand PLN w-Luborzyca Wawrzeńczyce 700 ice-Przeginia Czernichów 100 Czernichów 800 Iwanowice 300 awrzeńczyce 100 Igołomia-Wawrzeńczyce Czernichów -3 Czernichów III.5.2-5 Kocmyrzów-Luborzyca Czernichów Krzeszowice Igołomia-Wawrzeńczyce Liszki Iwanowice Michałowice Jerzmanowice-Przeginia Mogilany Kocmyrzów-Luborzyca Skała Krzeszowice Skawina Liszki Słomniki Michałowice Sułoszowa Mogilany Świątniki Górne Skała Wielka Wieś Skawina Zabierzów Słomniki Zielonki Sułoszowa Jerzmanowice-Przeginia Iwanowice Igołomia-Wawrzeńczyce III.5.2-1 III.5.2-1 400 150 150 100 100 50 50 0 million 400 PLN 350 300 250 200 150 100 50 0 30,000 60 40 20 50,000 120 45,000 thousand 0 100 PLN 40,000 100 35,000 30,000 25,000 10,000 80 60 20,000 40 20 0 400 200 III.5.2-5 Wieliczka district 700 300 200 III.5.2-7 200 III.5.2-3 80 40,000 35,000 35,000 30,000 60 30,000 25,000 25,000 20,000 20,000 40 15,000 10,000 10,000 20 5,000 5,000 thousand PLN thousand 0 PLN Zielonki 15,000 Chart 4. The number of transactions and trading of houses in the municipalities of the county of Krakow in 2014 III.5.2-5 III.5.2-5 80 60 40 20 0 100 0 III.5.2-7 100 200 200 300 300 400 500 400 500 600 700 600 700 800 800 25,000 60 60 20,000 20,000 15,000 40 15,000 40 10,000 10,000 20 20 5,000 5,000 thousand PLN thousand 0 PLN 0 Wieliczka – town Wieliczka – municipality Niepołomice – town Wieliczka – town Niepołomice – municipality Wieliczka – municipality Kłaj Niepołomice – town Gdów Niepołomice – municipality In the county of Krakow in 2014, for the fourth time in a row, there was an increase in the number of transactions in which the selling party was a natural person. The activity of developers in the last three years has remained at a constant level of 200-230 transactions, which should be considered as a positive sign in the current market. (Chart 6) 0 25,000 The analysis of the price of 1 m2 in development transactions in the county of Krakow shows – as in previous years, that in municipalities with a large number of such transactions there has been a significant difference between the maximum and minimum price, depending on the stage of completion of the sold building. (Chart 8) Biskupice Kłaj Świątniki Górne Zabierzów Sułoszowa Wielka Wieś Słomniki Świątniki Górne Skawina Sułoszowa Skała Słomniki Mogilany Skawina Michałowice Skała Liszki Mogilany Krzeszowice Michałowice Kocmyrzów-Luborzyca Liszki Jerzmanowice-Przeginia Krzeszowice Iwanowice Kocmyrzów-Luborzyca Igołomia-Wawrzeńczyce Jerzmanowice-Przeginia Czernichów Iwanowice Igołomia-Wawrzeńczyce Czernichów The historical analysis of average transaction prices for real estate in the county of Krakow, in with the most developed market, shows a downward trend. In the 100most municipalities 100 municipalities of Skała and Sułoszowa, for the third time in a row, there was an increase thousand thousand in the average amount spent on the purchase of a single-family house. Data indicates PLN PLN a decrease in the differences between prices in particular municipalities. In the town and municipality of Wieliczka, the average prices for a house are beginning to stabilize; only in the municipality of Biskupice there was a significant increase. (Chart 3) III.5.2-6 30,000 In the county of Wieliczka, the number of transactions in real estate development increased for the third time in a row. Equally optimistic information result from data concerning transactions made by individuals – for the first time in three years there has been an increase in the number of such transactions. (Chart 7) In the county of Wieliczka, transactions in the town and villages of the municipality of Wieliczka 400 400dominated. (Chart 5) The most expensive transaction was the purchase of a house in the municipality of Biskupice – a new building on a 12-are plot was bought 300 300 for almost 1 million PLN. III.5.2-6 80 30,000 Krakow district Krakow district Wieliczka district Wieliczka district Zielonki Gdów 200 35,000 80 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl Zabierzów Biskupice 200 35,000 The number of transactions and trading houses in the county of Wieliczka The maximum values on the graph of trading volume correspond to the maximum values 700 700 of the number of transactions. (Chart 4) The highest trading price in 2014 was recorded 600 600 in the municipality of Mogilany – nearly 2.5 million PLN was paid for a 26-are property. 500 100 Number of transaction 800 500 40,000 Chart 5. Wielka Wieś Zielonki 800 45,000 Turnover (thousand PLN) Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl 120 100 40,000 Wieliczka – town 40,000 120 50,000 45,000 Wieliczka – municipality 45,000 Kłaj Biskupice Niepołomice – municipality Gdów Niepołomice – town Kłaj Wieliczka – municipality Niepołomice – municipality Wieliczka – town Niepołomice – town 45,000 50,000 100 Gdów 50,000 100 Biskupice 50,000 Zabierzów Iwanowice Czernichów Jerzmanowice-Przeginia Igołomia-Wawrzeńczyce Kocmyrzów-Luborzyca Iwanowice Krzeszowice Jerzmanowice-Przeginia Liszki Kocmyrzów-Luborzyca Michałowice Krzeszowice Mogilany Liszki Skała Michałowice Skawina Mogilany Słomniki Skała Sułoszowa Skawina Świątniki Górne Słomniki Wielka Wieś Sułoszowa Zabierzów Świątniki Górne Zielonki Wielka Wieś Igołomia-Wawrzeńczyce Czernichów III.5.2-3 III.5.2-7 050 0 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 50 100 100 150 25 150 200 500 20 000 Wieliczka – miasto Wieliczka – gmina Niepołomice – miasto Niepołomice – gmina Kłaj III.5.2-7 III.5.2-6 powiat wielicki 100 0 Gdów Zielonki Biskupice In 2014, developers maintained their activity in the municipalities around Krakow at the level from 2013 and 2012, while in the county of Wieliczka this type of activity recorded an increase. Zabierzów Unit prices should be analysed separately for each municipality, generally there is a smaller difference between prices in the most expensive and least expensive municipalities. There is still a lot of interest in cheaper properties located outside the borders of Krakow. Wielka Wieś Świątniki Górne Sułoszowa Słomniki Skawina Krzeszowice Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Iwanowice Wieliczka – miasto Igołomia-Wawrzeńczyce Niepołomice – miasto Czernichów Wieliczka – gmina Kłaj Niepołomice – gmina Gdów Biskupice at krakowski Summary In 2014, the number of transactions stabilized (county of Krakow), or even increased (county Wieliczka), which is a positive sign from the real estate market. Skała 10 000 In the county of Wieliczka, developers 20 5 000 conducted 200 their activities mainly in the tys. PLN 0 municipalities of Niepołomice and Wieliczka. 100 When comparing the average price per 2 of usable floor area in the years 2014 1 mtys. PLN and 2013, there has been an increase in the minimum. (Chart 8) Mogilany 300 40 Michałowice 15 000 Liszki 400 200 300 500 400 700 600 800 50 0 2007 100 150 2007 2008 2008 Chart 6. 2009 Comparison 2009 of the number of transactions carried 2010 out by developers and individuals 2011 (natural persons) in the county of Krakow Wieliczka – miasto 2013 Wieliczka – gmina 2012 Niepołomice – miasto Niepołomice – gmina Gdów Kłaj 2011 Biskupice Source: Instytut2012 Analiz Monitor Rynku Nieruchomości mrn.pl Number of2013 transaction Developers 2014 Individuals 2014 III.5.2-7 III.5.2-8 0 50 100 150 250 200 350 300 400 20076 000 powiat krakowski powiat wielicki 20085 000 Chart 7. 20094 000 Comparison of the number of transactions carried out by developers and individuals (natural persons) in the county of Wieliczka 2010 3 000 2011 2 000 Source: Instytut Analiz Monitor 2012 1 000 Rynku Nieruchomości mrn.pl 2013 Wieliczka – miasto Wieliczka – gmina Niepołomice – miasto Kłaj Niepołomice – gmina Individuals Gdów Zielonki Developers Zabierzów Wielka Wieś Świątniki Górne Sułoszowa Słomniki Skawina Skała Mogilany Michałowice Liszki Krzeszowice Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Iwanowice Igołomia-Wawrzeńczyce 2014 Biskupice Number of transaction PLN Czernichów Zielonki Zabierzów 2010 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 100 Maximum price 1 m2 Wieliczka – town 2007 50 Wieliczka – municipality 2007 Niepołomice – town 0 Niepołomice – municipality 800 Kłaj III.5.2-6 Gdów Krakow district Biskupice Average price 1 m2 Zielonki 6,000 Zabierzów 700 Wielka Wieś * lack of bar means no development transactions in a given municipality Świątniki Górne 600 Sułoszowa Słomniki 500 Skawina Skała 400 Mogilany Michałowice 300 Liszki Krzeszowice 200 Kocmyrzów-Luborzyca Jerzmanowice-Przeginia 100 Iwanowice Igołomia-Wawrzeńczyce 0 Czernichów Wieliczka – town Wieliczka – municipality Niepołomice – town Niepołomice – municipality Kłaj Gdów Biskupice Zielonki Zabierzów Wielka Wieś Świątniki Górne Sułoszowa Słomniki Skawina Skała Mogilany Michałowice Liszki Krzeszowice Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Iwanowice Igołomia-Wawrzeńczyce Czernichów thousand PLN III.5.2-7 150 Chart 8. Minimum, average and maximum prices per 1 m2 of a house in the municipalities of the county of Krakow and Wieliczka in development transactions* in 2014 III.5.2-8 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl Minimum price 1 m2 Wieliczka district 5,000 4,000 3,000 2,000 1,000 PLN 27 200 LAND IN KRAKOW In 2014 the land market in Krakow was still affected by the recovery from the second half of 2013. This trend was related to investment land, primarily for residential multi-family buildings and commercial land for office development. A good example of recovery is the example of several transactions with prices above 10 million PLN. Increased activity may be explained by the belief that at the end of 2012 and in the first half of 2013 prices reached the lowest possible level and part of the capital from bank deposits was transferred to the land and housing market. At the same time, there was a new influx of capital from investment funds, especially foreign funds: investors with “cheap money”, looking for an alternative to the record-low interest rates of safe treasury bonds. This is also confirmed by a large sale transactions of built-up commercial real estate. In Krakow there was an increase in the number of transactions on the land market, with an increase in turnover as compared to 2013. Preliminary data indicates a turnover of about 750 million PLN, with approx. 800 transactions. However, we should remember that these are preliminary data, and due to the growing demand in the last quarter of the year part of the transaction have not been disclosed. mln PLN 100 million PLN 100 200 300 400 500 600 700 800 900 1 000 200 300 400 500 600 700 800 900 1,000 Chart 1. 2009 PLN/m2 500 1 000 1 PLN/m2 500 1,000 1 Krowodrza Trading on the land market in Krakow* 2010 2009 2011 2010 2012 2011 2013 2012 2014 2013 Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl Krowodrza Nowa Huta * Charts do not include land purchased by the Municipality Nowa Podgórze and the State Treasury inHuta connection with the investment in road infrastructure and the contributions made between Podgórze different entities.Śródmieście Preliminary estimates for 2014 Śródmieście 2014 0 100 200 300 400 500 600 700 800 900 0 100 200 300 400 500 600 700 800 900 Chart 2. 2009 2010 2009 2011 2010 2012 2011 2013 2012 2014 2013 The number of transations on the land market in Krakow* Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl * Charts do not include non-market transactions, land purchased by the Municipality and the State Treasury in connection with the investment in road infrastructure and the contributions made between different entities. Preliminary estimates for 2014 2014 In the poor year 2009 there were approx. 500 transactions, at a very low value of turnover of 270 million PLN. In 2011 there were approx. 650 transactions with a value of turnover of 500 million PLN. The revised data for 2012 showed about 550 transactions with a value of turnover of about 550 million PLN. The data for 2013 indicate about 750 transactions, with turnover of about 650 million PLN. Preliminary data for 2014 indicate 800 transactions, with turnover of about 750 million PLN, which as compared to 2013 is an increase in the number of transactions by about 7%, and the value of turnover increased by approx. 15%. Statistics indicate an increase in the unit value of transactions and the emergence of new funds on the land real estate market that have been transferred from bank deposits and also, to some extent, from the bond market, which have reached record low yields. The emergence of new, often inexperienced market players indicates an upward trend, but is also a warning against excessive optimism. (Chart 1, 2) In 2014, the average transaction price of building land in Krakow amounted to more than 600 PLN/m2 and significantly increased as compared to the year 2013, where the price was approx. 480 PLN/m2. This was a result of the fall in the number of transactions concerning plots for single-family houses and an increase in the number of transactions concerning multifamily housing, and a significant increase in the average price of land intended for services. Invariably, the largest quantity share of traded land, as in previous years, included plots intended for single-family housing. Their share in transactions of construction land declined in 2014 to 50% from 60% in 2013. Considering the value of transactions, the land real estate market was dominated by land intended for residential multi-family and residential and service buildings, whose share in the land trade increased by another 10% as compared to 2013 and amounted to over 55%. The increase in turnover in the segment of land for residential multi-family and residential and service buildings was at the expense of plots for single-family houses, whose share fell below 15%. Turnover on service plots remained at approx. 30%, similarly as in 2013. Krowodrza has become a leader in terms of turnover in this segment, with nearly 45% of market share, despite the decline in the average transaction price to about 900 PLN/m2. The decline in prices is due to the dominant number and value of transactions in the area of the widely understood Bronowice and surrounding areas, where land has less intensive development. The prices of housing rose in relation to 1 m2 of usable floor area. The average annual prices fell in Nowa Huta (as in Krowodrza, due to the purchase of land with a lower intensity of development) and have not changed in Podgórze. In the city centre, the average price rose to more than 3,000 PLN/m2 due to transactions in Kazimierz and the strict city centre (streets: Piłsudskiego, Żółkiewskiego, Czarnowiejska). Good sale results of apartments achieved by developers in 2013 encouraged them to replenish the land bank. New players appeared on the market attracted by the sale results and a vision of solid gains in the development industry. The land market for residential multi-family and residential and service buildings in terms of number and value of trading was unbalanced in different districts. Investors focused on the areas of Podgórze and Krowodrza, which accounted for almost 75% of turnover. 29 The most interesting transactions involved the sale of land for multifamily housing – at Katowicka Street (Bronowice): with an area of nearly 7 hectares for nearly 90 million PLN (1,280 PLN/m2) and at Buszka Street: 2.6 hectares for less than 22 million PLN (835 PLN/m2). In Nowa Huta at Centralna Street the developer acquired over 7 hectares of land designated for services in the zoning plan for 16 million PLN, which is in the process of judicial proceedings to annul it. In Podgórze at Ludwinów, a plot at Spiska Street, with an area of 1.7 ha was acquired by a developer (Echo Investment) for a price of over 32 million PLN, but it was also the subject of the transaction in 2013 for a comparable price, so the transaction may have been only a formal transfer. (Chart 3) The market of plots intended for residential single-family houses, despite the existing supply, showed – in comparison with the year 2013 – an increase in the average price in Krowodrza and Podgórze. Market participants focused on good, more expensive locations, avoiding the risk of less esteemed locations. The average transaction price of plots for residential single-family housing fell in Nowa Huta, but its number was relatively low. 00 600 700 900 800 1,000 The market of plots intended for services (commercial buildings) continued its upward trend that began in 2012. It can be said that in 2014 the market picked up speed, especially in the segment of land for office development. There were some very interesting transactions, thanks to which the average transaction price of plots intended for services increased significantly in 2014 to 1,200 PLN/m2 from 950 PLN/m2 in 2013. The prices of commercial land intended for commercial usage ranged from 300 to 1,800 PLN/m2. The prices of commercial land intended for office development ranged from 600 to 3,000 PLN/m2. The most interesting transactions involved the purchase of land with an area of approximately 20 a intended for a hotel in the vicinity of Galeria Krakowska, with a unit price of 9,850 PLN/m2 and an area of more than 2 ha for office develoment, also in the area of Galeria Krakowska, with a unit price of almost 3,000 PLN/m2 and the transaction price at nearly 70 million PLN. In the market of industrial plots, generally found in Podgórze and Nowa Huta, there was stagnation, with a small number of transactions. The price level in the major industrial areas of these districts was similar or slightly lower as compared to 2013, i.e. in Podgórze – in the range 120-250 PLN/m2, and in Nowa Huta – in the range between 60-200 PLN/m2. PLN/m2 Chart 3. The average prices of plots for multi- and single-family housing in the area of Krakow in 2014 Krowodrza Nowa Huta Source: Instytut Analiz Monitor Rynku Nieruchomości mrn.pl Multi-family housing 500 600 700 Podgórze Single-family housing 800 Śródmieście 900 500 1,000 Summary Overall, the land market in Krakow was characterized by recovery started in mid2013, which is confirmed by the increase in the volume of transactions and turnover. The most active market was in the segment of plots for residential multi-family and residential and service buildings. Developers replenished land banks, new players appeared on the market attracted by the prospects of solid profits. The commercial plots segment maintained its favourable trend from the 2012 and 2013. There was continued interest in plots for office development. Record low interest rates worldwide and excess liquidity of certain funds, especially foreign funds, results in the fact that capital searches for alternative investments in relation to low-interest treasury bonds and part of it goes to the commercial real estate market – including the land market. The segment of plots for single-family housing showed an increase in relation to the average transaction price (with the exception of Nowa Huta), where the number of transactions dropped. 1,500 2,000 2,500 3,000 3,500 LAND IN THE SUBURBAN AREA In contrast to the previous years of analysis, in 2014, the real estate market the county of Krakow witnessed an increase in the number of transactions. An increased number of transactions does not imply an increase in average unit prices, which show a slight downward trend. (Chart 2) This situation is a result of the increase in the number of transactions of agricultural land, and a stabilization of demand for land for residential purposes. A corresponding situation occurs on the real estate market in particular cadastral units. The analysed municipalities show relative price stability, with a slight downward trend in Jerzmanowice, Skawina, Zabierzów. The precursor of the recovery phase seems to be the municipality Świątniki Górne and Zielonki, where the average prices in the last three years have been progressive. In other units, price fluctuations indicate a phase of depression (end of decrease, the analysed values remain at a low level, similar to previous years of exploration). (Chart 3) Invariably, in the last few years, the most expensive municipalities are Zielonki, Wielka Wieś, Zabierzów and Mogilany, only their order in the ranking changes. Currently, the maximum price is recorded in Zielonki, and the minimum price in the municipality of Igołomia-Wawrzeńczyce. 31 VI.2-1 500 % 10 20 30 50 40 60 2,500 450 80 70 400 2010 90 100 2,000 2011 350 2012 VI.2-2 VI.2-5 2013 300 2014 1,500 90 250 200 2 500 120 1,000 85 150 100 Chart 1. 60 The80 number of land transactions and trading volume in the county of Krakow 20 5002 20100 PLN/m 0 75 2011 million PLN 2010 VI.2-22012 1 500 2013 80 Trading volume Number 2 PLN/m of transactions 0 2010 2014 Rynku Nieruchomości – mrn.pl 50 2013 Source: Instytut Analiz Monitor 2010 2012 2 000 40 2011 100 80 60 2014 90 40 1 000 85 % VI.2-4 30 50 40 60 70 80 90 100 20 2011 Average price of 1 m2 of undeveloped land in the county of Krakow 75 2012 0 2013 Source: Instytut Analiz Monitor VI.2-5 2 2014 PLN/m Rynku Nieruchomości – mrn.pl 0 20 80 2010 Chart 2. 500 10 2010 2011 2012 2013 2014 120 Chart 3. The average price of 1 m2 of undeveloped land in the county of Krakow 2010 Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl VI.2-8 30 40 20050 60 70 120 80 90 100 2011 2012 2013 2014 100 100 80 40 60 20 20 0 150 PLN/m 2 80 2010 2011 100 2012 VI.2-5 2013 50 60 2014 40 20 0 20 PLN/m 2 100 Zielonki Zabierzów Wielka Wieś Świątniki Górne Sułoszowa Słomniki Skawina Skała Mogilany 120 Michałowice Liszki Krzeszowice Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Iwanowice Igołomia-Wawrzeńczyce Czernichów PLN/m2 40 20 Undoubtedly, the major price emitter is the city of Krakow, whose proximity implies the highest prices. Demand for land near Krakow is constantly high. The further away from Krakow, the cheaper. The reversal of this trend occurs in the area of the so-called local centres, namely smaller urban centres. Similarly to the previous years of analysis, in 2014, the land market of the Krakow county is determined by land intended for housing development, constituting about 59% of all transactions. Second, in terms of the number of transactions, is agricultural land (including land for green areas), constituting approx. 36% of the total transactions. Land intended for other purposes was an insignificant part of the relevant market. (Chart 4) A small number of transactions of land other than housing and farming land, and a significant price range result in the fact that averaging or aggregation operations can lead to wrong conclusions. In view of the above, this part of the market has been omitted and is not the subject of further analysis. In terms of the number of transactions, the largest increase – about 30% – was recorded in the sector of agricultural land (a relative difference in the number of transactions in the analysed segment of the market between 2013 and 2014), with a relatively stable demand for residential land. It should be noted that a slight decrease in the number of real estate transactions for residential purposes concerned the peripheral municipalities of Krakow, which are of an agrarian character. In the neighbouring municipalities, the demand for residential land was still high. (Chart 6 and 7) Fluctuation of average unit prices in the analysed real estate market segments is insignificant. The year 2014 implies their progress both in the housing market, as well as agricultural land market. 33 % VI.2-4 PLN/m2 0 2010 2014 2013 2012 2011 2010 mln PLN 10 20 30 50 40 60 70 80 90 100 Chart 4. 2010 The structure of transactions according to the use of land in the county of Krakow 2011 2012 VI.2-5 2013 Source: Instytut Analiz Monitor 2014 Rynku Nieruchomości – mrn.pl Communication Residental Agricultural land Services 1 VI.2-8 1 120 100 80 40 60 20 20 0 PLN/m2 2010 2011 2012 2013 2014 200 150 100 50 Słomniki Skawina Skała Mogilany Michałowice Liszki Krzeszowice Kocmyrzów-Luborzyca erzmanowice-Przeginia Iwanowice ołomia-Wawrzeńczyce PLN/m2 Czernichów VI.2-3 2014 120 VI.2-8 100 120 100 80 40 60 20 20 0 PLN/m2 Chart 5. 2010 2012 2013 60 Source: Instytut Analiz Monitor 2014 Residential land 80 Average unit prices of land for residential and agricultural purposes in the county of Krakow 2011 Rynku Nieruchomości – mrn.pl Agricultural land 40 20 Summary The land market is slowly emerging from 0 a phase of depression to recovery. With regard to the average unit prices, the residential land market is characterized by relative stability. The exception is the municipality of Skała, in which there was a significant price disparity, which is the result of transactions in expensive real estate situated in the town of Skała. The municipality of Skawina is the only municipality of the Krakow county which has not emerged from the phase of crisis. The area has recorded a permanent decline in the prices of residential land. (Chart 8) The forerunners of the recovery are the following municipalities: Zielonki and Świątniki Górne. The agricultural land market is undoubtedly the precursor of the recovery phase, both in terms of the number of transactions, as well as the average unit price. The demand for this type of land affects the growth of unit prices. The highest price of land for agricultural purposes was recorded in the municipality of Zielonki. (Chart 9) VI.2-3 In 2014 there was an increased demand for property for agricultural purposes and an increase in their unit prices. 200 The price of land for residential purposes (investment) is determined by the distance from Krakow and local centres in particular cadastral units. A similar situation is in the field 150this sector of the market seems to be more harmonious. of agricultural land, whereas In the sector of construction land, we have observed stabilization of unit prices and the number of recorded transactions. 100 In the five-year period of analysis, the largest group of buyers of plots of land were individuals, the second largest group consisted of entrepreneurs (companies, partnerships, natural persons conducting50business activity, etc.), the third, small group, were local government units and other institutions. In typically agricultural municipalities, the share (Chart 10) of entrepreneurs was negligible. 2 150 125 100 VI.2-6 75 50 25 35 Wielka Wieś Świątniki Górne Sułoszowa Słomniki Skawina Skała Mogilany Michałowice Liszki Krzeszowice Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Iwanowice Igołomia-Wawrzeńczyce Czernichów PLN/m PLN/m22 PLN/m2 2012 2013 2013 Zielonki Zielonki Zielonki Zielonki Zielonki Zielonki Zabierzów Zabierzów Zabierzów Wielka Wielka Wielka Wieś Wieś Wieś 2013 Zielonki Zielonki Zielonki 2012 Zabierzów Zabierzów Zabierzów Wielka Wielka Wielka Wieś Wieś Wieś Świątniki Świątniki Świątniki Górne Górne Górne 2012 Zabierzów Zabierzów Zabierzów 2011 Świątniki Świątniki Świątniki Górne Górne Górne 2011 Wielka Wielka Wielka Wieś Wieś Wieś 2010 Sułoszowa Sułoszowa Sułoszowa Słomniki Słomniki Słomniki 2011 Świątniki Świątniki Świątniki Górne Górne Górne 2010 Sułoszowa Sułoszowa Sułoszowa Słomniki Słomniki Słomniki Skawina Skawina Skawina Skała Skała Skała Mogilany Mogilany Mogilany Michałowice Michałowice Michałowice Liszki Liszki Liszki Krzeszowice Krzeszowice Krzeszowice Kocmyrzów-Luborzyca Kocmyrzów-Luborzyca Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Jerzmanowice-Przeginia Jerzmanowice-Przeginia Iwanowice Iwanowice Iwanowice Igołomia-Wawrzeńczyce Igołomia-Wawrzeńczyce Igołomia-Wawrzeńczyce 2010 Sułoszowa Sułoszowa Sułoszowa Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl Słomniki Słomniki Słomniki Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl Skawina Skawina Skawina Skała Skała Skała Mogilany Mogilany Mogilany Michałowice Michałowice Michałowice Liszki Liszki Liszki Krzeszowice Krzeszowice Krzeszowice Kocmyrzów-Luborzyca Kocmyrzów-Luborzyca Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Jerzmanowice-Przeginia Jerzmanowice-Przeginia Iwanowice Iwanowice Iwanowice Igołomia-Wawrzeńczyce Igołomia-Wawrzeńczyce Igołomia-Wawrzeńczyce Czernichów Czernichów Czernichów Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl Skawina Skawina Skawina Skała Skała Skała Mogilany Mogilany Mogilany Michałowice Michałowice Michałowice Liszki Liszki Liszki Krzeszowice Krzeszowice Krzeszowice Kocmyrzów-Luborzyca Kocmyrzów-Luborzyca Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Jerzmanowice-Przeginia Jerzmanowice-Przeginia Iwanowice Iwanowice Iwanowice Igołomia-Wawrzeńczyce Igołomia-Wawrzeńczyce Igołomia-Wawrzeńczyce 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Czernichów Czernichów Czernichów 0 0 Czernichów Czernichów Czernichów Chart 6. The number of transactions in residential land in the county of Krakow 2014 150 150 125 125 100 100 75 75 50 50 25 25 Chart 7. The number of transactions in agricultural land in the county of Krakow 2014 Chart 8. The average price of 1 m2 of land for residential purposes in the municipalities of the county of Krakow 2014 250 250 200 200 150 150 100 100 50 50 Iwanowice 400 200 200 0 Zielonki 2013 800 800 600 600 400 Chart 10. The sum of land transactions according to buyers in the county of Krakow Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl Municipality Natural persons Entrepreneurs 0 37 Zielonki Zabierzów Wielka Wieś 2012 Zabierzów Świątniki Górne Sułoszowa 2011 Wielka Wieś Świątniki Górne Słomniki 2010 Sułoszowa 30 Skawina Skała Mogilany Michałowice Liszki Krzeszowice Kocmyrzów-Luborzyca Source: Instytut Analiz Monitor Rynku Nieruchomości – mrn.pl Słomniki Skawina Skała Mogilany Michałowice Liszki Krzeszowice Jerzmanowice-Przeginia Kocmyrzów-Luborzyca Jerzmanowice-Przeginia Igołomia-Wawrzeńczyce Iwanowice PLN/m2 Liszki 10 Czernichów 20 Igołomia-Wawrzeńczyce Czernichów 40 Igołomia-Wawrzeńczyce Sułoszowa Jerzmanowice-Przeginia Igołomia-Wawrzeńczyce Iwanowice Jerzmanowice-Przeginia Skała Iwanowice Świątniki Górne Skała Słomniki Świątniki Górne Mogilany Słomniki Michałowice Mogilany Czernichów Michałowice Wielka Wieś Czernichów Krzeszowice Wielka Wieś Kocmyrzów-Luborzyca Krzeszowice Zielonki Kocmyrzów-Luborzyca Skawina Zielonki Zabierzów Skawina Liszki Zabierzów 50 Sułoszowa 50 Chart 9. The average price of 1 m2 of land for agricultural purposes 40 in the municipalities of the county Krakow 2014 20 30 PLN/m2 10 KUP MIESZKANIE Z PORTALEM I KORZYSTAJ Z RABATÓW W PROGRAMIE TERAPROFIT j u p ku z s e j u t a b a r i e sz krn .p l k re o d om www.krn.pl TERAPROFIT .pl 39 ZZZWHUDSURĆWSO WydziDõRozwoju Miasta / UrzÇG0iasta Krakowa City Development Department / Municipality of Krakow [email protected] www.krakow.pl 41 Major areas of office concentration in Krakow Source: Knight Frank Prądnik Biały Mistrzejowice Prądnik Czerwony Bronowice Wzgórza Krzesławickie Bieńczyce Krowodrza Zwierzyniec Stare Miasto Grzegórzki Nowa Huta Czyżyny Podgórze Dębniki Łagiewniki -Borek Fałęcki Podgórze Duchackie Bieżanów-Prokocim Swoszowice Rentable stock: Under construction: Vacancy rate: Rents: City Centre North South 103,500 m2 232,900 m2 227,500 m2 43,200 m2 47,300 m2 37,100 m2 4.7% 6.6% 3.8% 13-14.5 EUR/m2/month 10-14 EUR/m2/month 10-14 EUR/m2/month The Municipality of Krakow City Development Department pl. Wszystkich Świętych 3-4 tel: +48 12 616 15 48 fax: +48 12 616 17 17 e-mail: [email protected] www.krakow.pl Publisher: Partners: Media partners: