Asking prices versus transaction prices: how much of a discount can be negotiated?

"Is the price of the flat negotiable?" asks a potential buyer with a slightly cheeky smile. "It is, to some extent, as always…" the estate agency representative showing the buyer around the flat replies a little reluctantly. Such an exchange can be heard at practically every property viewing. It also shows the clash of interests between the parties to the transaction – the client wants to buy the property as cheaply as possible, while the agent tries to secure the best possible price for their own client. There is always a difference between the asking price and the transaction price, however. How big? That depends on a number of factors: the agent's negotiating skills, the buyer's powers of persuasion and market trends. In which Polish cities is it hardest to negotiate? How big a reduction can clients count on? We present a summary for the first half of 2017.

Two-room flats

In most cases the difference between asking and transaction prices is a dozen or so per cent. Of course, there are properties that are sold with a much smaller discount, and there are also those for which the reduction is set at a much higher level. Over the last six months in Poland's largest cities, flats sold for at least 10 per cent below the initial asking price. This means that if the asking price of a flat was 320 thousand PLN, buyers negotiated as much as 32 thousand PLN off! That is still not much, however, if we consider that in Sopot the difference between the average asking and transaction prices for two-room flats was… as much as 30 per cent!

This year's survey covered the markets of Warsaw, Kraków, Poznań, Wrocław, Gdańsk, Gdynia and Sopot. For comparison, data from the same period in 2016 and 2015 were used. As we have already mentioned, Sopot is the record holder. Next come Warsaw and Gdańsk, with a 15 per cent difference between asking and transaction prices (2nd place), followed by Gdynia and Kraków with a 13 per cent difference.

What is the situation in Poznań and Wrocław? Haggling is hardest here, and clients often failed to reach even the 10 per cent mark. The average differences between the listed price and the final sale price were 6–7 per cent.

Discounts on studio flats too

As for the smallest flats, here too the transaction prices do not match the listed prices. The situation is the same as with two-room flats: in the last half-year, discounts of as much as 26 per cent could be negotiated in Sopot. In second and third place in this ranking are Gdańsk (21 per cent) and Gdynia (20 per cent), respectively.

The report discussed did not cover cities such as Katowice, but to compare the situation in this city we can use the annual report of the National Bank of Poland on the situation on the property market in Katowice for 2016. It shows that at the end of the year in Katowice the average asking price was 3,957 PLN/m² and the average transaction price 3,577 PLN/m². It is therefore easy to calculate that the average price reduction was slightly under 10 per cent of the initial price.

Price negotiations are an inherent stage on the road to selling and buying property. It is good if the owner allows for the possibility of coming down on the price, and it is also good if the buyer does not expect to buy a flat for next to nothing. The most important thing is to find a compromise solution that will satisfy everyone.