REGIONAL DIFFERENTIATION OF

RESIDENTIAL PROPERTY MARKETS IN

POLAND

prof. Ewa Kucharska-StasiakPhD Magdalena ZalecznaPhD St. Konrad Zelazowski

Department of Real Estate and InvestmentUniversity of Lodz

The aim of article

Identification of regional differences in functioning of housing markets in Poland

Identification of main factors responsible for regional differences in property prices

Current situation of Polish housing

One of the lowest number of dwellings per 1000 inhabitants in EU

0

100

200

300

400

500

600

700

Spain

Greec

e

Finla

nd

Portu

gal

Fran

ce

Bulgar

ia

Denm

ark

Sweden

Germ

any

Est

onia

Austri

a

Cypru

s

Belgium Ita

ly

Latv

ia

Czech

Rep

ublic

Irlan

d

United

King

dom

Hunga

ry

Nethe

rland

s

Sloven

ia

Lithu

ania

Roman

ia

Slovak

Rep

ublic

Luxe

mbu

rg

Poland

Malt

a

Overcrowded housing stock

Average useful floor area per person

Declining financial support of the State

Direct budget expenditures on housing sector

Low affordability of housing

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

2 000 2 001 2 002 2 003 2 004 2 005 1kw06

2kw06

3kw06

4kw06

1kw07

2kw07

3kw07

4kw07

1kw08

2kw08

3kw08

4kw08

1kw09

2kw09

3kw09

4kw09

Sq. m. available for average monthly wage

Regional differences in housing markets

Regional differences in housing stock

Regional differences in transaction activity

Regional differences in housing prices

Regional differences in housing stock

Region Dwelling per

1000 inhabitants

Regional capital cities

Dwelling per 1000

inhabitants

Łódzkie 380,8277 Łódź 454,80

Mazowieckie 383,1256 Warszawa 477,63

Małopolskie 326,7055 Kraków 425,82

Śląskie 368,437 Katowice 439,63

Lubelskie 334,958 Lublin 390,73

Podkarpackie 294,8944 Rzeszów 361,55

Podlaskie 347,977 Białystok 395,60

Świętokrzyskie 332,2844 Kielce 383,06

Lubuskie 343,8206 Zielona Góra 400,72

Wielkopolskie 319,9748 Poznań 423,67

Zachodniopomorskie 353,9964 Szczecin 396,84

Dolnośląskie 366,2487 Wrocław 418,59

Opolskie 329,7488 Opole 385,18

Kujawsko-Pomorskie 334,7981 Bydgoszcz 389,88

Pomorskie 343,3614 Gdańsk 408,58

Warmińsko-Mazurskie 335,4173 Olsztyn 398,82

Average 348,5297 Average 409,44

Regional differences in transaction activity

Residential property transactions per 1000 inhabitants

Regional differences in transaction activity

Residential properties sold by local governments and by the State

Residential properties sold by private inwestors

Residential property prices

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

Katowice Kraków Łódź Poznań Szczecin Warszawa Wrocław

Regression of property prices

),,,,,,,( iiiiiiiii PopANSSUICGDPFP

iGDP

iC

iI

iU

- GDP per capita

- Construction costs

- Average monthly wages

- Unemployment rate

iS

iNS

iA

iPop

- Housing stock (dwellings per 1000 inhabitanta)

- Supply of new dwellings per 1000 inhabitants

- Residential property transactiions related to existing stock

- Population age structure (number of young people 25-44 per 1000 inhabitants)

 Variable Min Max Mean Coefficient of variation

Pearson's correlatio

n coefficien

t

P 3128,25

6923,25

4480,88 21,22% 1

GDP 26095 98854 42932,8 43,9% 0,795

C 2133,13

2660,59

2342,92 5,06% 0,718

I 3060,42

4603,26

3494,00 13,49% 0,564

U 2,9% 11,6% 6,71% 38,42% -0,558

S 361,55 477,63 409,44 6,97% 0,519

NS 2,42 13,70 6,08 54,63% 0,771

A 0,07% 1,45% 0,53% 68,59% 0,018

Pop 286,01 325,34 309,62 3,77% 0,670

Estimated regression

Coefficient Std. error t-ratio P-value

const -8150,73 3199,92 -2,55 0,02432

GDP_per_capita 0,033 0,0068 4,90 0,00029

Pop 36,18 10,62 3,41 0,00469

Mean dependent var 4480,875 S.D. dependent var 981,9434

Sum squared resid 2800570 S.E. of regression 464,1428

R-squared 0,806366 Adjusted R-squared 0,776576

F(3, 12) 27,06843 P-value(F) 0,000023

iiii PopGDPP 210

Empirical vs theoretical prices

3000

3500

4000

4500

5000

5500

6000

6500

7000

4000 4500 5000 5500 6000 6500

P

warto¶ci predyktora P

Wroclaw

Bydgoszcz

Lublin

Zielona

Lodz

Krakow

Warszawa

OpoleRzeszow Bialystok

Gdansk

Kielce

Olsztyn

Poznan

Szczecin

empiryczne = prognozowane

Summary

• Analysis of regional housing markets confirmed existing differences in their functioning

• Selected fundamental variables were successful in explaining regional variation in residential property prices.