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Interest in buying flats has definitely increased during the pandemic, and as recently as the first quarter of this year, developers were pointing out that demand for flats in some local markets was outstripping supply, which meant that prices were holding up or rising. With what sales results did developers close the first half of the year? Will demand remain high?
Many developers note that in 2021 they have recorded a definite increase in flat sales since the outbreak of the pandemic. As Andrzej Oślizło, CEO of Develia S.A., explains, the strategy of offering products that fit the needs and preferences of all groups of buyers from major cities in Poland has made it possible to achieve high sales. In the first half of 2021, the developer sold 1062 units. In 2020, 423 units were sold and in 2019 – 618. Although the lockdown had an impact on the reduced interest in purchasing flats last year, customers were eager to return to the developers’ sales offices.
For many developers, 2021 is a record year in terms of units sold. According to Zbigniew Jaroszek, CEO of Atal, one cannot talk about a bubble in the residential market, because the situation is still healthy. The demand, especially on the primary market, is high and the customers are mostly those who want to buy property for their own residential purposes. Although according to the Think Forward Initiative survey, as many as 73.6% of Poles surveyed do not plan to invest in buying a home in 2022, it is forecast that the high demand from individual customers should continue into the second half of 2021. Banks are still willing to grant mortgage loans, which encourages potential investors.
As Zbigniew Jaroszek adds, the first half of the year was very satisfactory for Atal. In June alone, the developer contracted 428 units, 1,223 in the second quarter, and as many as 2,070 in the entire six months. The company counts on further customer interest and expects to sell as many as 4,000 units in the whole of 2021.
According to Małgorzata Ostrowska, director of the Marketing and Sales Division at J.W. Construction Holding S.A., it is not only low interest rates that drive the demand for flats but also high inflation. According to the National Bank of Poland, sales of housing loans increased by 42% year-on-year and by 50% compared to the first half of 2019. And this could mean that interest in buying flats in 2021 will continue to grow, and developers could break another annual sales record. Until now, smaller flats bought for investment purposes have been the most popular. However, the number of customers interested in buying flats of larger sizes for their own needs is growing.
Another developer who confirms the upward trend in sales is the Robyg Group, which in the first half of 2021 signed approximately 2,100 development and preliminary agreements in Warsaw, Gdańsk, as well as Wrocław and delivered 1,100 units. As Joanna Chojecka, director of Sales and Marketing for Warsaw and Wrocław at Robyg S.A., adds, this is a record sales result, and the company plans to sign more than 4,000 reservation agreements and hand over 3,000 units this year. The developer has launched as many as 14 new projects in 2021, and further investments include the purchase of land for over PLN 600m.
Other developers also point to an increase in demand, comparing sales results to those before the pandemic. According to Sebastian Barandziak, CEO of Dekpol Developer, real estate development was temporarily halted in 2020, but in the first half of 2021 the company increased sales to 264 units and returned to pre-pandemic sales levels, and in the last six months managed to record its best sales since 2018. Other companies that can also look forward to increased sales include Home Invest, Eco Classic, and Aurec Home.
What do developers pay attention to?
An important issue affecting sales is also the fact that developers have a land bank with permits, which enables the smooth start of sales and construction work. According to Andrzej Gutowski, vice-president and director of the Sales Department at Ronson Development, it is the constantly expanded land bank that allows meeting various needs of the market and, above all, responding to the high demand in the residential sector. The developer currently owns a land bank for about 4208 units. As the company’s vice-president adds, the pandemic is favourable not only for the housing market, but also for Ronson Development – 604 units were sold in the first half of 2021, and the company recorded a 42% y/y growth.
Wojciech Chotkowski, CEO of Aria Development, has a similar opinion on the sales growth during the pandemic. He points out that demand has definitely increased compared to 2019, with small flats of between 30 and 40 sqm being the most willing buyers. However, the problem is beginning to be the lack of land for multi-family developments offered at reasonable prices, and this may be associated with a slowdown in the development of the residential market.