DEVELOPMENT OF THE HOUSING
MARKET IN POLAND AND
POTENTIAL FOR RENTALS
Grzegorz Panek
University of Silesia, Katowice
POLAND
Historical evolution of the housing
situation and policies
Aging resources and unit scarcity
• 2008 – proportion of houses constructed
before 1989 to overall number of houses
(residential) – 84,8%
• In mid 90’s nearly 30% of municipal units in
the cities still came from before 1918
Wars and crises
• Landlords’ position has always been tough:
• 1919 – government freezes rents at 1914
rates.
• 1944 – same formula applied (pre-war rents)
Landlords ousted gradually
• Ladnlords’ empty pocket
• Public authorities and institutions could claim
title to premises reconditioned from their own
funds where private owners failed to comply
with the duty to renovate tenements at their
own expense
Social ownership
• Special protection referring to assets held by
the state, cooperatives and other NGO’s – art.
1261 PCC.
• Private ownership and construction of lease
persisted (unlike e.g. in Czechoslovakia or
DDR), however, private stock submitted to the
system of administrative allocations and
regulated rent (with scarce public support for
repairs)
Housing deficit is nothing new
• Shortly before the WW II statistical unit was
occupied by 4.83 persons,
• statistical room by 2,56 individuals
• Comparable data from England, Holland or
Denmark – the number of occupiers already
exceeded the number of rooms.
Outset of transformations
• 1988 –housing deficit: 1,295,000
• By 1995 the shortfall increases to 1.4 million
• 33.6% of all households lived in substandard
conditions
• 1995 – basic utilities (running water, gas,
sewage – 84% of urban and 56% of rural stock.
Supply and demand
• First years ot transformation - market still
framed by supply of residential units,
depending on budgetary funds allocated to
new investments
• 1992/93 – awaited reorientation of the
housing policy – demand starts to shape the
market
• Fall in investments (limited cash-flow, no real
mortgage market)
Mid 90’s –getting out from under
• 1995 – 1/5 of Polish families could not afford a
separate dwelling (ownership or rental)
Tenancy – new opportunities
• It was easier to intervene in the tenancy
market than develop a sound mortgage
market
• 1994 – Residential Tenancies and Housing
benefits Act (to bring back the meaning to
ownership and preserve tenant rights)
• Preserved regulated rent, contractual lease;
housing benefits
Privatization
• 1988 – 32% urban residential units in the
hands of private individuals
• 1994 – 45%
• Currently – 65%
• Privatization of the municipal and cooperative
stock (sale of units to their tenants)
Cooperatives
• Huge investor in the 70’s (for individuals, and
state employers), 80’s slowdown (still 50% of
all investments)
• 90’s still a major investor (1898 -1/3 of the
construction market with faltering developer
sector)
• Turn of the centuries – cooperatives still hold
1/3 of the housing stock (13% by now)
Developers
• Appeared in mid 90’s
• Promising beginnings – 1998 – 11% of the
primary housing market (3.7 in 1996 and 6.9
in 1997)
• At the turn of the century circa 400
developers operating in Poland
• Early 2000’s – real boom
Municipal stock shrinking
• 1997 worst year in terms of investment statistical municipality constructed 1 unit (not
house)
• 1998 – slightly better – 4% of the building market
• Municipalities inclined to streamline
management of the existing stock, though rheir
aging resources need replacement.
• Successive privatization – by 2000 there have
been 66.4 thousand condominiums in Poland
Public task rentals
• Art. 4(2) TPA 2001 – municipalities required to
assure social and replacement units, and cater to
the needs of low income households within the
legislative framework
• General municipal stock – lease for unspecified
period (2010 – 1 month to 18 years depending on
locality)
• Social and replacement premises – only
temporary, though contract may be prolonged –
incomes below threshold enacted by municipality
Social units
• Long waiting lists – not only income criteria,
but also court awards in eviction judgments:
pregnant women, minors, disabled,
incapacitated/interdicted, bedridden,
pensioners, (registered) unemployed;
• Other groups of evicted tenants – at court’s
discretion
TBS – Social Building Associations
• Introduced in 1995; companies limited by shares
or cooperatives formed by juridical persons,
municipal participation
• By definition low income households (statements
every 2 years), but thresholds not particularly low
and 30% tenant participation in construction
costs allowed.
• Active investor 79 thousand units by now
(municipalities 1.06 million, but TBS houses are
brand new)
• 2009 - Liquidation of the National Housing Fund
Tenancy contracts
• Legislative Duality: PCC and Tenants
Protection Act
• TPA: abusive contract provisions, unexpected
forfeiture of tenure, excessive rent increase
(from rent control to rent increase control),
sidewalk eviction
• Private ladlords insecure – termination only
for reasons set out in the TPA
• 2009 – occasional lease
Rental investments
• RoI: 5.5 (Warsaw: 4.5, Katowice 6.5)
• Developers unwilling to rent units. They
prefair certain income from mortgage loans.
Effects of crisis
• 2008/2009 – slowdown after previous
construction boom. Demand fell. Differences in
bank requirements concerning mortgage credit
immense.
• Bank pocztowy – PLN 300,000 (EUR 71,5000) –
earnings over PLN 3,852 (EUR 917)
• SGB Bank – same amount for earnings of PLN
2,000 (EUR 476)
• Own participation – sometimes as much as EUR
15,000
New hopes
• 2010 – annual growth in house prices – 4.2%
(EU as a whole 0.7%)
• 2009 – same figure: -0.9%