The metro: a game changer!

„Well-connected with the rest of the city” is a slogan that almost all developers use to attract buyers to their projects. However, only the lucky few can claim "the vicinity of an underground station". And whether the station is already there or will still take years to complete (as in Bemowo), there are few things attract homebuyers more. Housing prices in Bemowo have already equalled those in Praga Południe or Wilanów.

Those districts of Warsaw which can be reached by metro are becoming more attractive, as shown by the examples of Praga Północ or Wola. The two districts have undergone a significant transformation recently. Only a few years ago, they were largely dominated by post-industrial areas, and Praga's neighbourhoods of Szwedzka or Stalowa enjoyed the reputation of the most dangerous in the capital. Hardly anyone wanted to build there, and the numbers of units on offer in the two districts were several times lower than today. These days, their asking prices are mind-boggling – they have reached PLN 12,600–12,800 per sqm. Apart from the unrivalled Śródmieście, those are only matched by Ochota, where the supply is very limited. 

Costly greenfield

The first underground station in Bemowo will be completed by 2022. It will be located near the intersection of Powstańców Śląskich and Górczewska. The Górce part of this area has already been intensively developed in recent years. The rest of the area around the new station accommodates the 1980s blocks of flats in Jelonki Północne and the protected Przyjaźń housing estate. 

“Being aware of how attractive these areas are, the city allows in its urban planning to densify the Jelonki Północne estate, mainly through new projects on plots currently occupied by old commercial facilities or large parking lots. The city-owned Przyjaźń estate will be particularly coveted by developers,” says Aleksandra Gawrońska, Consultat at JLL Poland Residential Research.

The Bemowo section of the metro will extend towards the southwest and reach as far as Połczyńska. Its completion is planned for 2024. Apart from the new residential developments in Chrzanów, most of the area is still occupied by agricultural land, which is becoming more valuable each year. Rising land prices and improving infrastructure are reflected in the prices offered by developers. In 2013–2015, when the first projects appeared in Chrzanów, developers launched units at PLN 6,000–7,000 per sqm (the average for Warsaw at that time was PLN 7,800–8,100 per sqm). As the prospect of the metro in the area was becoming more realistic, the prices of new units accelerated. In 2016–2017 the average price rose by another PLN 1,000.

In 2018, housing prices increased significantly throughout Warsaw – mostly due to the increase in construction costs and land prices. In Bemowo, prices in new development projects broke the barrier of PLN 8,000 PLN per sqm. Furthermore, in the first half of 2019, new launches elevated the average price to PLN 9,057 PLN per sqm, a price level comparable with that in Praga Południe, Ursynów or Wilanów. This did not discourage buyers, however, and the volume of transactions recorded in Bemowo in the last quarter was higher than the new supply.

Stable demand, shrinking choice

In 2013–2018 as many as 1,200 units on average were completed annually in Bemowo. Years 2016 and 2018 were exceptional in this respect, as the housing output reached 1,800 units in each of those years. In general, the years 2016–2018 were a time of high developer activity. During this period, nearly 4,800 units were completed, which is 45,7% more than in 2013-2015 (ca. 3,300 units). Years 2016-2018 also mark the boom in sales for Bemowo. Approximately 5,300 units were purchased during that period – it was 37% more than in 2013-2015. 

Aleksandra Gawronska says that so far, the strongest developer activity has been observed in Górce. “However, it is the south-western part of Bemowo that currently has greater potential for housing development, and it is exactly where the future second line metro stations are located.”

Prospects for the coming years are a little less optimistic. The projects with planned completion dates in 2019 and 2020 are either partly completed or well-advanced, and it is unlikely that they will provide more than 1,000 new units annually. Compared to 2017, when sales volumes were the highest, the first half of this year saw the buyer activity decreased by 43% with just over 600 units sold. All of this is driven by the shrinking supply. Currently, only 650 apartments are available in the district, which is among the worst results since 2010, and nearly 1,000 units less than in 2016. For now, buyers have to wait for new housing projects to be announced in this part of Bemowo.

“The situation is aggravated by the fact that the zoning plan for the part of Chrzanów where most land for new housing is located is still in the making. New developments are also hampered by the insufficient technical infrastructure in the area”, Aleksandra Gawrońska, Consultat at JLL Poland Residential Research, adds.

According to the forecast by the JLL residential team, a moderate increase in the housing output is expected in this area. According to the experts, a larger number of new housing units will appear there in the years 2025–2030, following the zoning plan changes allowing greater density of new developments and the completion of the second line of the underground. For sure, however, we will not see such intensive urban development as in Wola. What we can expect, though, is further price increases, albeit not as rapid as in the past few quarters.