– In Poland, there are currently over 35,000 active condo hotel apartments, around 5,000 are under construction – says Dariusz Książak, president of the board of Emmerson Evaluation. Developers’ offer will grow, but much slower than in previous years. The reason for the slowdown is a decline in demand, and indirectly – rising interest rates, which on the one hand limit the creditworthiness of people interested in buying a flat on credit, and on the other – make deposits a more attractive investment than in the previous few years. In addition, the lower than expected rates of return on investment in condo hotel apartments discouraged some investors.
The report “Hotel and condo hotel market in Poland 2022”, prepared by Emmerson Evaluation, shows that the interest in the condo system increased during the COVID-19 pandemic
– The condo market has been very dynamic in the last two years. Due to low interest rates, investors chose real estate as an alternative to deposits banking. The condo hotel market was developing very dynamically, says Dariusz Książak, Newseria Biznes agency.
As a result, both private individuals and entrepreneurs were more and more willing to invest in this segment of the real estate market each year. Now, however, there are fewer interested in such an investment. Although not so much that the prices of such real estate fell.
– The condo hotel market, like the housing market or the market of traditional hotels, has suffered significantly as a result of limited access to mortgage loans – informs the president of Emmerson Evaluation. – Customers who had to support their purchases with a loan, in fact, evaporated from this market, only cash customers remained, so the demand is much lower. As a result, it is likely that developers will cut supply somewhat in the coming months.
Especially that with the increase in interest rates, the attractiveness of bank deposits, a much less demanding form of investing money, increased again. And developers in the condo market are less and less likely to guarantee specific returns on such an investment.
– In the last two years, 6-, 7-, and even 8-percent were guaranteed. returns on such investments by developers. Currently, fewer and fewer of them already guarantee such returns or these guarantees are smaller, and this also contributes to the decline of this market – notes Dariusz Książak.
Despite the marked slowdown, the supply of new and planned projects remains at a high level. The authors of the report argue that due to the limited possibilities of financing hotel projects by banks, investments in condo systems will be continued, financed by the buyers of the premises.
In 2021, the number of condo hotels and facilities with holiday apartments in major cities and resorts increased by approx. 3 thousand. Most of them have recently been created in the coastal region. mainly in Kołobrzeg and Rogów, and the largest newly opened facility was Shellter Hotel & Apartments, which offers 550 apartments. The second most developing region is the south of Poland, including mountain holiday areas. As for the largest agglomerations, new facilities have been launched
– At the moment, we have over 35 thousand. operating condo premises, approx. 5 thousand units is currently under construction, but we expect the market to slow down a bit due to lower demand – the expert estimates. – In the following year, two years, the dynamics will be lower, we will probably fall to the level of 2-3 thousand. apartments built in subsequent years.
There are over 18 thousand. investment apartments, and by 2024 there are to be 14 percent. more (additional 2.5 thousand). A similar number is to be built in the mountain range, although the existing base here is much smaller (approx. 12,500 premises). Next in terms of supply are agglomerations (approx. 8,700 apartments plus 1,000 new ones to be built by 2024). Warmia and Mazury is far behind (only slightly more than 1.1 thousand flats), but here the expected dynamics by the end of 2024 will be the highest (27.5%).