(Bloomberg) -- Murapol SA’s owner raised 404 million zloty ($101 million) in its initial public offering as investors bet on the continued health of Poland’s housing boom.

Ares Management Corp. sold a 30% stake in residential builder Murapol for 33 zloty per share, according to a statement, versus a maximum marketed price of 35 zloty each. The IPO values Murapol at about 1.35 billion zloty, it said.

The first-time share sale ends a two-year drought in Warsaw IPOs. Murapol is benefiting from strong sentiment after state-subsidized mortgages triggered an abrupt surge in demand for new homes. It also lured buyers with the promise of a hefty dividend. Ares widened scale of offering from 25% stake planned for sale initially as it witnessed strong investor demand in the book-building ended Dec. 5.

“During talks with investors, we saw real interest in our business model,” Chief Executive Officer Nikodem Iskra said in a statement. Buyers were lured by the firm’s resilience to housing market fluctuations thanks to its focus on less expensive apartments and strong position as the country’s second-biggest homebuilder, according to the statement.

Warsaw’s WIG Real Estate index has risen 44% this year, contrasting with the industry’s gloom in Europe. The sector has been bolstered by state subsidies allowing first-time buyers to cut cost of interest rates on their mortgage to about 2% annually. The program, launched before Poland’s parliamentary elections, together with the start of monetary easing, boosted new lending to record levels in October. 

Even before the start of stimulus, Polish home prices were surging. Elevated demand from Ukrainian refugees and the post-pandemic recovery helped to offset the negative impact of high interest rates. Amid a scarcity of new projects, prices of apartments surged more than 20% this year in the country’s main cities, while developers’ margins jumped to multi-year highs. 

Investors subscribed to Murapol IPO despite uncertainty whether the mortgage program will continue, especially as the incoming government after October’s elections hasn’t said whether it will inject more funds. High demand has nearly depleted the existing budget for the subsidies. 

During the election campaign, Civic Platform — the main party from opposition block that won a parliamentary majority — planned to bolster stimulus and offer loans with zero interest. It also sought to subsidize rents. Meanwhile, concerns are rising that the current aid is lifting real estate prices too fast and curbing housing availability for less affluent Poles. 

--With assistance from David Morris.

(Updates with context, company’s comments from 3rd paragraph)

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