We would like the memes comparing our lives as modern twenty-somethings to the situation of our parents when they were young to have nothing to do with reality.
This is a serious topic that can affect various areas of life, and one of them is even your psyche. After all, where you live has an impact on your well-being - if, for example, you still live with your parents, you may feel depressed by the fact that you cannot afford to become independent.
Housing crises are a universal phenomenon that regularly affect communities around the world. So much so that this motif has also spread to pop culture. One example of the use of this topic is the film "The Big Short", based on facts, starring Steve Carell and Brad Pitt, which tells the story of why there was no escape from the financial crisis in 2008. The film bluntly shows how business sharks are taking advantage of the current situation to profit from the entire system of pathologies that they managed to notice before others in the real estate and credit markets in the United States. "The Big Short" also shows episodes of real estate agents who talk about their work and "swindling" clients. On the other hand, we have victims of these practices, i.e. people who were deceived and lost their life's work.
So the question that worries young people is whether they will ever have their own apartment at all? Will they be able to afford to buy their own property alone, without the help of their parents and grandparents? Reality shows that this is unfortunately very difficult.
Cezary Maciołek from the Progres Group commented on this phenomenon.
“We observe that young people increasingly and very consciously decide to stay at home for several years after starting work. In this way, they want to save money faster to buy or rent an apartment and build a financial cushion, so that they can later enter independent life with a greater sense of security.
Research shows that young people leave their family home later and later. There are many reasons for this state of affairs. This is a direct result of the high costs of independent living. If your perspective is that it is difficult to find your first, well-paid job, you did not receive a scholarship during your studies and you do not come from a well-off family, it is natural that you would prefer to live with your parents. The key obstacles to becoming independent and renting your own place are financial issues, but also the availability of apartments at a decent price and the prospect of satisfactory earnings in a given city. It is also important whether our parents will be willing to support us financially, e.g. at the beginning of our move out. The above-mentioned issues significantly influence whether you decide to move out of your family home at all.
As we can read in the report of the consulting company ThinkCo. "Rental 2030. Directions of development of apartment rental in Poland", in the perspective of 2030, only the richest will be able to afford to buy an apartment. This leads to a simple conclusion - more and more of us will be forced to settle for renting. 60 percent of specialists creating this report believe that in seven years rental will be the leader in the real estate market.
As the classic says - appetite grows with eating. If someone is studying, they will not have high requirements, so renting will not be a big problem for such a person. However, the matter becomes more complicated when we have graduated, want to start a family and are slowly thinking about stabilization. Then you would need your own place.
Someone might think that young people are demanding these days and assume that they deserve an apartment. However, owning a flat is not a matter of vanity or the desire to live in luxury. Having your own place to live gives you a sense of security, influences your mental well-being, and gives you a sense of fulfillment and agency. In addition, many young people are pursuing higher education, competing in the labor market and constantly improving their professional qualifications, so it is natural that they want a return on this investment in themselves and their careers. This phrase can be, for example, your dream apartment.
To illustrate the problem we are dealing with, let's look at the current housing prices. Over the last few years, costs have increased significantly - in some locations they have even doubled compared to 2010.
From the analyzes of Expander and Rentier.io. shows that since January, apartment prices have increased by an average of 11 percent.
As the data show, it is not only Poland that is facing a problem on the housing market. As we can read on the Forsal.pl website, we are currently witnessing the worst construction crisis in Europe. And it's all because of costs, bureaucracy and strict regulations regarding energy efficiency. The crisis affects highly developed countries the most. New building permits in Germany dropped by over 27%. in the first half of 2023, in France they decreased by 28%. by July, while house construction in the UK is expected to fall by more than 25% this year. The situation is no better in Sweden, which is experiencing the worst stagnation since the crisis of the 1990s.
Your own place to live is an important need of every person, which gives a sense of security and belonging. By owning your own apartment or house, you become attached to a given place and its surroundings, and you also develop neighborly relations. If your financial situation does not allow for such a scenario, you can live with your parents or rent an apartment. This second option, however, does not give such a sense of security and belonging, but rather uncertainty and depression.
Economic realities clearly show that currently few people can afford their own apartment. Our reality reveals one paradox - we are too wealthy to live in a municipal apartment, but at the same time too poor to take out a loan for our own apartment. Magdalena Milert points out that this mainly applies to young adults who, due to little professional experience, have little earnings and therefore little credit opportunities.
Why have apartments become so valuable?
The "Safe 2% Credit" program certainly has a significant impact on the current price level. , which by mid-November resulted in over 82,000. applications and granting over 36 thousand loans with a total value of PLN 13.6 billion. This project shows that it is temporarily beneficial and actually helps Poles buy real estate. However, there is a risk that those who decide to take advantage of the program next year may have to take out a larger loan because housing prices will be higher. All because of the huge demand for purchasing real estate using the government program. It is worth mentioning, however, that not everyone who would like to have their own home will receive a loan. This is due to insufficient creditworthiness. The lack of it means that we are not reliable customers for the bank and therefore it will not grant us a loan.
The reasons for the increase in apartment prices can also be seen in the high dynamics of prices of construction materials, and higher costs of materials and workmanship translate into at least a 5% to 10% increase in apartment prices this year. The matter is not made easier by the fact of rampant inflation, which in August 2023 amounted to over 10%, and in February it was as much as 18.4%. Wages are rising, but we can realistically afford less, regardless of the value of a given product or service. The prices of both basic necessities and construction materials have increased, so the cost of building a house or apartment has become a huge financial challenge.
Do you hope to have your own apartment? Or maybe you are already its happy owner? Let me know in the comments.
Sources:
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