The secondary market is perceived as competitive due, among other things, to its lower asking prices, shorter period of waiting for a flat or apartment and not infrequently convenient location.
Relying on the database of housing sale offerings in the area of Warsaw provided by the Web-bulletin GazetaDom.pl and a REAS-developed model, we have calculated percentage impact of individual drivers on the price per 1 sq. m of housing space in the secondary market.
Our analysis has taken account of the influence of eight factors. Of major – and negative – importance among them is whether a given building was built in any of the 1970s/1980s decades (and thus constructed of large reinforced-concrete slabs). If yes, the price for such flat drops by 16% on average. Another material price-informing factor – this time, a positive one – is proximity of an underground station (up to 1 km): its average rate of influence upon the price is nearly 15%.
If there is a park within less than 500m of the building, the price to pay for the residential unit will increase by 5.5%, on average – it being remarked, however, that proximity of such greenery area is certainly of much higher importance to young married couples with children. For the young unmarried on-the-go, such proximity is virtually unimportant – hence, the average weight of +5.4% only.
A cemetery, if located not far away, may reduce the unit’s price by more than 5%. If there is a railway line or an industrial area in the proximate vicinity (up to 200 m), the price would automatically drop by 2%, on average.
Pricing varies depending upon the storey on which the unit is located: the higher the storey, the lower the price – the average decrease rate being 0.1%. This is completely different to what we come across in the primary market where the higher the storey is, the higher the price, proportionally. What is, then, the rationale behind lower prices of residential units at higher building levels in the secondary market? Probably, a buyer’s reluctance ensues from fear of breakdown of the lift or of any other inconveniences relative to high levels in case of old tower buildings. Ground-floor apartments are an exception to this rule: a ground-floor unit is typically a few per cent cheaper, on average, than a first-floor unit.
Distance from the city centre is a variable that reflects the location’s quality in most general terms. The corresponding ratio calculated using our model indicates that with each subsequent 1 km of growing distance from the centre, the price per 1 sq. m of unit decreases on average by 1.9%.
The above enumerated drivers heavily contribute to the final price of residential unit. However, they only make up 30% of all the price constituents. The actual final price chargeable is informed by the apartment’s layout and quality of its finish.
