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What direction will the housing sector take in the coming 2-3 years? Will the supply of housing fall? Will demand be sustained? What will the market balance depend on? The poll was conducted by the real estate website dompress.pl.
Andrzej Oślizło, President of Develia
We believe in a long-term growth of the residential market. Our goal for this year is to sell 1750-1850 flats, i.e. about 30% more compared to 2020. We have adopted a strategy according to which we want to increase the scale of operations in the residential segment to the level of sales of 3100 flats in 2025. In the first quarter of this year, we recorded very strong interest in the offer from customers, so we expect demand for flats to continue at a high level. Many people who held off buying a flat due to the pandemic have returned to the sales offices because their housing needs are still there. In addition, there is a large group of investors for whom real estate will continue to be an attractive form of investment. In our opinion, the exclusion of people working in the industries most affected by the pandemic from the group of potential buyers will not significantly affect sales levels. Even if the negative scenario were to come true and sales were lower than last year, this would be due to a decrease in supply and a further increase in prices rather than a decrease in customer interest. The limited availability of land remains a challenge for the industry, which is why we actively approach the building of a land bank, e.g. by increasing the role of the land purchase department within the organisation.
Zbigniew Juroszek, CEO of Atal
Among the factors supporting the industry and stimulating the growth of interest in developers’ offers are the record low interest rates, which translate into greater interest in credit for the purchase of flats and encourage people to invest capital in real estate. At the same time, we are still dealing with very large and unsatisfied residential needs in Poland. We are still making up for many years of systemic deficiencies and we are still far from managing the needs in this respect. All comparisons of housing resources indicate that in this respect we are lagging behind the Member States of the European Union.
Moreover, the enrichment of society and the trend to exchange flats for larger, more comfortable ones is an additional factor supporting supply. Naturally, high demand and a good position of real estate on the investment market mean good prospects and potential for further growth of the primary residential market. Thus, despite the current health and economic constraints, we look to the future with optimism.
It should be noted, however, that the ability of developers to overcome administrative difficulties and quickly launch new projects, as well as the availability of land for future investments, will have a significant impact on maintaining the balance of the market and the availability of flats on offer.
Cezary Grabowski, Sales and Marketing Director of Bouygues Immobilier Polska
The next 2-3 years will be devoted to rebuilding the number of apartments sold, which is currently falling by 20% year on year. With this rate of decline in sales, the key to maintaining balance on the market will be to find a balance between demand and the number of new flats launched for sale. For the time being, we do not foresee further declines in supply. Demand will remain high, also due to the activity of investors for whom purchase of a flat is still an attractive way of investing their savings, especially with low-interest bank deposits. The situation on the market should now be assessed as stable. The whole industry entered the new year full of optimism. We intend to introduce new flats in Warsaw, Poznań and Wrocław, and we also plan to enter a new market, the Tricity.
Wojciech Chotkowski, President of the Management Board of Aria Development
If there are no more lockdowns, we assume the continuation of a slightly slower growth of flat prices this year. At the same time, in the conditions of the expected long period of low interest rates and a strong rebound of the economy, the purchasing power of Poles will once again increase, which should strengthen further demand for flats in the period of 2-3 years.
Zuzanna Należyta, Commercial Director at Eco Classic
According to our forecasts, the next 2-3 years will be a period of further price increases. There is still a shortage of flats in Poland, still many young people who lack creditworthiness are unable to live on their own and decide to rent.
Along with economic growth, salaries will continue to rise, and so will the ability to rent flats. Funds investing in flats for rent and individual investors will continue to benefit from this. In turn, the low level of mortgage interest rates will continue to stimulate the purchase of premises for own use.
The decrease in the supply of land, the increase in its prices, the extension and complexity of the investment process, the increase in the cost of producing 1 sqm of a flat caused by the amendment to the Development Act and the introduction of the Developer Guarantee Fund will contribute to the further increase in the prices of new flats.
Boaz Haim, CEO of Ronson Development
The experience of the pandemic has taught us to forecast the future with humility and great caution. If we take as a good coin the current behaviour of customers on the real estate market – active and courageous – we could expect a very good situation in terms of demand. Especially if lending rates remain low. However, the assessment of the market and the forecasts for the future must take many criteria into account. A great deal will therefore depend on the state of the labour market, the level of unemployment and general consumer sentiment.
The supply side looks and will look slightly different. Firstly, our industry operates in long cycles, by which I mean, among other things, all the administrative procedures or general contracting. Secondly, there is no more land in big cities. This resource is limited. So we will face the challenge of successive increase in supply. Of course, our land bank has been secured and in the coming months we will start new projects, e.g. in Grunwald in Poznań and in Warsaw. Certain trends are already visible today. Our clients are looking for larger spaces where they can easily find space for remote work. They are also more willing to invest within agglomerations rather than in their city centres. There is a visible turn towards ecology.
Mariola Żak, Marketing and Sales Director, Aurec Home
Let’s remember that prices of flats are influenced by the demand, which is currently high. Developers would build much more, but unfortunately they struggle with prolonged administrative procedures and low availability of land. Aurec Home’s land bank makes it possible to build about 3,000 flats, but our goal is to continue to develop and purchase more plots to be able to build an additional 1,000 flats in 2021. New investments are now predominantly built where there is still enough space. That is why in Warsaw, districts around the centre, with good infrastructure and sparse housing development, such as Wola, Bemowo, Ursus and Włochy, are gaining popularity.
Aurec Home’s clients are mainly people who buy flats for their own needs, others are small investors who invest their savings in real estate. For now, we do not observe much interest in flats on the part of foreign investors, but this will change once pandemic-related restrictions are lifted. Smaller foreign investors will be very interested in flats in Poland, and larger investors are already looking for opportunities in the form of distressed offices, warehouses or hotels. In my opinion, after the pandemic, investors will have quite an impact on the commercial real estate market.
Tomasz Czubak, Director of Development Projects Preparation in Jakon
I think that in the next 2-3 years the market will maintain its current level. I think we are reaching the balance between demand and supply. Developers are more reasonable in introducing new investments. The demand side will still be interested in interesting locations. Real estate is still a reliable capital investment. Demand also depends on the availability of mortgage loans and the level of interest rates. At present, banks have loosened access to credit, which is evident among our customers. As for the change in interest rates, no significant increase can be expected in the period under review.
Małgorzata Ostrowska, Director of Marketing and Sales Division in J.W. Construction Holding S.A.
I believe that the sales of flats in the near future will be better than in 2020, unless we have problems with supply, resulting, for example, from administrative delays. Despite the pandemic, the market is holding up quite well. However, you have to take into account a lot of variables that can affect the situation, such as new construction and energy requirements, higher costs of investment implementation, additional taxes, the Developer Guarantee Fund. All indications are that low interest rates and inflation will continue to stimulate demand, but I am afraid that increased supply cannot be expected. Developers are still waiting too long for administrative decisions. The adoption of local plans is also too slow, and this affects the low supply of land.
Sebastian Barandziak, CEO of Dekpol Deweloper
We expect that in the perspective of the next 2-3 years the demand will remain at a high level. At the same time, we assume a high number of new development projects introduced to the market. Developers keep a close watch on customers’ purchasing behaviour and changing preferences. Therefore, subsequent projects will be adjusted to the new needs and expectations of customers. A large group of people will still be willing to buy real estate for investment purposes. This is currently one of the most popular forms of investment due to high inflation and low interest rates. Money left in a bank account systematically loses its purchasing value.
Monika Perekitko, Member of Matexi Polska Management Board
I believe that the Polish market still has a very long perspective of growing demand for modern flats. In addition to the continuing demand, resulting from the shortage in meeting housing needs, which is the main driver of this market, the institutional rental market PRS (Private Rented Sector) will develop in parallel. As for smaller investment buyers, for whom investments in the residential market are a natural alternative to bank deposits, we anticipate further growth in the near future. This will result, among other things, from the introduction of negative interest rates on deposits.
Adrian Potoczek, Sales and Marketing Director at Wawel Service
The supply on the developer market is falling considerably due to the rising cost of land, and the demand will continue to grow successively thanks to a wide offer of houses, flats and commercial premises built according to demand. Currently, the safest investment of capital is to buy a flat, which protects our profits. Investing money in real estate is the most profitable way of investing, which also drives sales to developers.
Joanna Chojecka, sales and marketing director for Warsaw and Wrocław at Robyg SA.
There is indeed an increasing investment demand in the residential real estate market, which is a result of both the interest of large foreign entities and the change in the investment activity of Poles who redirect their funds from deposits to real estate investments. We believe that the residential real estate market will develop steadily over the next two years. Demand will continue to slightly exceed supply due to procedural and administrative requirements for the launching of new investments. The growth of demand may also be stimulated by purchasers investing their capital, but homebuyers will still constitute a significant portion of buyers. There is still a shortage of 2-3 million flats in Poland. It is worth noting that the residential real estate market, due to its high competitiveness and free-market aspects, has been in balance and developing steadily for many years to the benefit of the country and society.
Edyta Kołodziej, sales and marketing director at Nickel Development
We expect further stable price growth in Poznań, but in fact much depends on how the economy recovers from the crisis caused by the pandemic. If credits are relatively cheap and available, consumer demand will remain high. On the other hand, if for some reason it falls, we expect investment demand to compensate. One should also remember the still high housing deficit in Poland. Poles have to live somewhere and if they do not live “on their own”, they will rent and investors focused on long-term renting will benefit from this.
Janusz Miller, Sales and Marketing Director at Home Invest
We predict that the market for new flats will continue to do well in the coming years. High demand for flats should continue. Low interest rates will continue to encourage people to invest money in real estate. The low cost of mortgage credit will translate into its increased availability to customers. Additionally, the housing market may benefit from the introduction of a housing voucher by the government, which could help buyers of flats to cover their own contribution in the form of subsidies or guarantees. Of course, there may also be a partial reduction of supply, as there are already difficulties with the availability of new investment areas, which will certainly translate into a further increase in housing prices.