Specialists are trying to find out how big the earthquake will be on the Eastern European real estate market. An analysis of the specialized site Ingatlan.com shows that more and more people are already trying to “get rid” of their homes. But the real kicker will come after the second or third set of huge utility bills.
Those who will not be able to bear the burden, will hurry to sell their houses. But it will not be easy for the sellers. After all, who would want to buy something sold just because it’s too burdensome? After the dramatic increase in housing prices in recent years, there is now a wave of price increases for maintenance and utilities.
In this context, it is expected that the real estate market will go in two directions. Efficient homes for any type of consumption, which do not require modifications, which are expensive but maintain their value over time, and non-insulated homes, without double glazing, which will become cheaper. Small-sized houses, where the consumption of electricity or heating is low, can also become popular again. The spectacular jump in the trend will be noticed after the owners receive the second or third bill with the new utility prices, around Christmas.
However, the pace of construction is slowing dramatically, and analysts say this is the result of developers’ fears that demand will continue to fall and property prices will collapse. Central bank data show that in the 6 largest cities, the number of apartments sold decreased in the second quarter by 53% compared to the same period last year.
The decrease reflects higher mortgage interest rates and more expensive credit conditions. But despite the reduced interest in purchasing housing, prices continued to rise. An explanation would be, according to Warsaw Voice, the developers’ desire to maintain margins.
The increase in interest rates and the increase in the price of credit are associated with inflation, which continues to accelerate. Therefore, credit will most likely become more expensive as the central bank will be forced to raise interest rates.This means even more difficult conditions for financing real estate purchases.