Country Report Poland Q1-2019
“Like a perpetual motion machine: the Polish real estate market just keeps going and going and going...”

Dear readers,

Like a perpetual motion machine: the Polish real estate market just keeps going and going and going. The Polish Real Estate Economy Index displayed positive development without significant upward or downward movement, with a rise of 0.5% in the first quarter. Foreign investors’ showed continued interest in Poland.  Moreover, investments beyond the real estate sector, such as in securities and bonds, are not very attractive at the moment. That has resulted in returns on top office properties in Warsaw falling as low as 4%. That means returns in the Polish property market are increasingly converging with those in Western European real estate markets. But that is not scaring off investors. Quite the opposite: they just keep on buying. Seen objectively, the situation is bizarre: everyone expects the market to weaken, but there continue to be no signs of that happening. The transactions continue – like a perpetual motion machine...


Your Beata Latoszek

Contact

Ms Beata Latoszek
Managing Director Poland

Phone: +48 22 828 02 53
E-mail: Beata.Latoszek@Deutsche-Hypo.de

Polish Real Estate Economy Index records a further slight gain

The consistency that characterised the Polish real estate market in 2018 has continued in early 2019. Compared to the previous quarter, the REECOX rose by just under one point, or 0.5%, to its current level of 187.6 points.

Remarkable development in the real estate share index

Meanwhile, the development of the input variables was somewhat contradictory.
The Polish leading share index WIG 20 rose slightly, by 1.6%, ending March at 2,312 points. The Polish real estate index WIG Developers presented a very different picture: Following decreases in the last three quarters, it saw a dramatic double-digit rise of 15.5% to approximately 2,213 points, above its level a year earlier.  That is remarkable in that, apart from January 2018, this constitutes its highest level since 2011. However, according to the Economic Sentiment Indicator (ESI), the assessments of Polish real estate experts do not point to further increases. Following a decline of 1.7% to 104.8 points, the index is at its lowest level since autumn 2017.

Synopsis of Input Variables and Real Estate Economic Situations Q1-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-1801/1902/19Q1-19Delta (%)
Q4-18 / Q1-19
DE
upup
up
do
eq
do
298.2
303.4
300.8
303.4
1.7
GB
up
upup
dodo
eq
do
204.9
205.5
200.7
205.1
0.1
PL
up
upup
do
eq
do
187.5
185.9
186.5
187.6
0.1
NL
upup
up
do
eq
do
191.3
190.4
190.7
191.4
0.1
FR
upup
upup
do
eq
do
223.7
225.4
225.9
228.3
2.1
ES
up
upup
up
eq
dodo
191.8
196.4
196.5
199.3
3.9