Changes in the Lower Silesia real estate market are certain
It is difficult today to estimate the losses caused by floodHowever, the large amount of water together with the enormity of the destruction also had consequences in the Lower Silesia region. real estate market will be felt for years.
– Homeless residents will have to quickly meet their housing needs, even if only temporarily. This will, in accordance with the basic principle of supply and demand, first affect the rental market, including short-term rentals. – notes in an interview with the legal advisor of “Gazeta Prawna” Krzysztof Granat, managing partner and leader of the real estate practice at K&L Legal Granat i Wspólnicy Sp.k.
Can we expect price increases in long-term rentals? According to the expert, the market will respond adequately to the increase in demand.
– Of course, local governments are currently trying to provide temporary accommodation, but conditions will by definition be less than ideal – since not only has the housing infrastructure suffered, but also the municipal infrastructure to the same extent. Supply in the rental market has decreased significantly, while demand will increase significantly, which unfortunately will affect prices, which are expected to increase. And this doesn’t mean taking advantage of a human tragedy – it’s hard to expect long-term rentals at current or lower prices if demand increases dramatically overnight. – says Mr. Granat.
Floods 2024 – real estate market
The flood situation will have a huge impact on both secondary and primary markets. However, the effects will be extremely different.
– On the one hand, a large part of the property is damaged or flooded, so significant renovation costs will be required. Some owners will probably not decide to do this, which is why significant amounts of properties for renovation will appear on the market. Expect more supply than demand, long waiting times for buyers and significant downward pressure on prices– says legal consultant Krzysztof Granat.
The situation was completely different for primary market properties, especially for those who were lucky and did not suffer flood damage.
– The few properties that were put up for sale before the floods and were not damaged could see their prices soar. They will supplement the housing base that is missing in the cities most affected by the floods. Prices may also be influenced by the rules of government programmes to support flood victims. If subsidies are only for renovations, they are unlikely to affect the housing market. However, if they are granted without further conditions, they could be used to purchase properties other than those destroyed, which is likely to increase demand and thus prices in local markets. – observes the lawyer.
Floods 2024 – prices of services in the construction industry
Dynamic changes are also expected in the construction services market. According to the expert, there is a simple relationship between the prices of construction services and materials and real estate prices.
– During reconstruction, we should expect a huge demand from residents and local governments for construction services and therefore a further natural increase in prices.– says legal consultant Krzysztof Granat.
However, rising service prices are not the only issue. With such a high demand for building materials, periodic problems with their availability can also be expected.
– Unfortunately, empty shelves in DIY stores in the south of the country can be a common sight. How will this impact the market? Even lower prices for apartments ready for renovation and higher prices for those in the primary market. The problems could also affect contractors who had signed renovation or construction contracts before the floods. There may be numerous disputes regarding liability for the consequences of flooding in buildings under construction or renovation – much will depend on the contracts and the distribution of risks provided for therein. – says lawyer Krzysztof Granat.
Expert: “We can expect great dynamism of phenomena, remodeling and instability”
According to the expert, the coming weeks will show the impact on the Lower Silesia region real estate market the current instability will leave its mark.
– One thing is certain: in the local markets of the areas most affected by the disaster, we can expect a lot of dynamism, remodeling and instability. The coming weeks will show whether this instability will be temporary or whether we will have to live with it for a long time.– summarizes lawyer Krzysztof Granat.
