Primary housing market in the context of wages and creditworthiness in selected cities in Poland in the years 2006-2019

Purpose: The paper presents the evolution of average unit prices of apartments in selected primary local markets in Poland in 2006-2019. The period covers the end of the price increase phase, their correction, and then stabilization and another upward phase. A characteristic feature of the study is that prices of apartments were presented not only in nominal terms, but also in several real term approaches.

Design/Methodology/Approach: The research was conducted using publicly available data on residential prices in selected cities. Prices were adjusted in a traditional way, i.e. by means of inflation indices, but also through the perspective of salary growth and creditworthiness. The results were presented graphically by means of charts.

Findings: It turns out that the above approach to the evolution of housing prices may lead to conclusions that are quite different from the stereotypical ones concerning the assessment of the housing market situation, its forecasts, as well as the assessment of threats and consequences of relations among prices viewed in varying ways. In particular, it has been shown that the observed tendencies do not seem favorable, since they lead to the perception of an apartment as an exceptionally expensive good, which, unfortunately, will not become apparent until turbulence of interest rates and income hit the market.

Practical implications: The results of the research can be applied to forecasts of housing market trends and are particularly useful to developers, banks, realtors, potential apartment buyers as well as the government bodies responsible for housing policy.

Originality/value: Similar research has not yet been conducted in the local housing markets in Poland. The conclusions from the study can provide an important signal regarding the direction of changes on the housing market.