Is demand for housing waning?
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Has interest in buying new flats decreased after the introduction of new restrictions? Has there been an increase in the number of investment buyers investing cash in property since the spring? Have there been any foreign investors among developers’ clients? The survey was conducted by dompress.pl real estate service.
Mirosław Kujawski, Member of the Management Board of Develia
After weakening due to the pandemic in the first half of this year, the sales situation improved noticeably in the third quarter. The customers who postponed their purchase, returned to sales offices and were more willing to make purchasing decisions. This is also confirmed by the sales results. In the third quarter we sold 358 flats under development and preliminary agreements, which means a 15% increase compared to the same period last year.
Due to the increase in the incidence of COVID-19, we have observed a slight decrease in customer contacts since mid-October. As far as investment clients are concerned, the pressure to protect capital against inflation and to invest in real estate is increasing. Average interest rates on deposits remain at a record low level, and flats continue to be an attractive form of investment for investors. Therefore, the interest of investment clients is still very high. However, it is difficult to talk about changes in the trend here, due to the fact that the number of such transactions to a large extent depends on the offer. It is a fact, however, that in the initial period after the introduction of the investment, the smallest units are invariably the most popular, especially in city centres.
Angelika Kliś, Managing Director for Sales and Marketing in Atal
Demand for housing remains high. There are invariably very large and largely unmet housing needs caused by the shortage of flats in Poland. Our observations show that the market share of investment clients remains at the same high level as in the first months of the year. We have not noticed any increased interest in buying flats from foreign investors.
Given the uncertain economic situation, clients, in the first weeks of the pandemic, withheld their decision to purchase, but returned to the sales offices with more optimism. As a result, June and July were months of recovery in demand. At present, the concerns of investment clients are more about the accumulation of funds in deposits and bank accounts. Individual investors looking for a stable place to invest their funds are willing to choose real estate. Individual clients, on the other hand, are afraid of a renewed tightening of credit conditions and an increase in their costs.
Natalia Sawicka, Sales and Marketing Director Angel Poland Group in Wrocław
March and April was a month full of hesitation on the part of customers who, in the face of the new situation, suspended their transaction decisions. However, as it turned out a few weeks later, the standstill was temporary. Later on, even with the reintroduction of restrictions, we did not see any reduced interest in premium properties. Among the clients of our Wrocław investment a large group are people from outside our country. Recently, for example, we have served clients living in Singapore.
Robert Stachowiak, CEO of SGI
The current situation on the market is quite complicated, but the interest in flats and the number of enquiries addressed to the sales departments remain the same. Investing in real estate is a good alternative to investing surplus funds in the products of banks, investment funds or the stock market. Such a model has been present for many years.
In our case, the vast majority are individual clients who buy flats for their own use. This applies both to projects currently under construction and our previous investments in Szczecin, Łódź or Warsaw. Since the beginning of the company’s activity, the units bought for the investment are in the minority. The same applies to foreign investors. We note a very small share of expats among buyers and those interested in our projects.
Tomasz Czubak, Director of Development Project Preparation in Jakon
Demand for housing has been fairly stable since July this year. After the first wave of the pandemic, many customers have returned to the idea of buying property. In some investments we have noticed an increased movement of people wanting to invest their free money in property. These are rather Polish investors, most of whom have been working with us for many years. We have not noticed a greater movement of foreigners.
Małgorzata Ostrowska, Director of Marketing and Sales Division in J.W. Construction Holding S.A.
The demand for flats, especially for small flats, does not weaken due to the shortage of flats. Nearly 11 million Poles belong to the Millenniums, born in 1980-2000, who make up 30% of the population. They are currently the most numerous target group for developers. One of the features distinguishing this generation is high mobility, ease of changing jobs and lifestyle. This generation, both when they decide to rent a flat and when they can afford to buy, usually selects flats with small space. The decision to buy their own flat is undoubtedly supported by low interest rates and high availability of mortgages. Due to inflation and low interest rates on deposits, small flats are also a target for investors, because it is the safest form of investing financial surpluses in years.
Bartosz Kuźniar, President of the Management Board of Lokum Deweloper
Demand for housing is very strong, and the restrictions introduced do not change the key decisions of customers. This also applies to investment premises, which constitute approximately 30% of our offer. Of particular interest are the projects which will be completed next year and next year, at a time when the pandemic is likely to be contained.
Monika Perekitko, Board Member of Matexi Polska
In our view, demand in the housing market remains rather stable. After the period of the first lockdown, when the economy practically stopped, and customers and banks largely held back from making decisions, the situation has normalized and we are observing again great interest in buying new flats.
Joanna Chojecka, Sales and Marketing Director for Warsaw and Wrocław at Robyg SA.
The second wave of the epidemic has not yet weakened the demand for flats, on the contrary. We are recording even more enquiries from potential customers. We also see a clear investment demand – especially as WIBOR is currently record low, which may encourage investments in real estate. As a good investment we offer Modern Space micro flats to our clients. The small size and promotional prices of the premises allow for a wide choice. The investment is even more profitable when using the VAT deduction option.
Zuzanna Należyta, Sales Director at Eco Classic
Despite the introduction of a partial lockdown in the second half of October, we did not notice a significant reduction in demand. This is completely different from the almost complete closure of the country the first time. Customers have already got used to the pandemic and the restrictions resulting from this situation. We are even seeing an increased interest in buying flats and a change in motivation and approach to buying flats. We are currently observing three leading customer groups. Those who want to put excess money into the good that will not lose value. Clients who are looking for more space due to more time spent at home than before. And a group of people who are afraid of a significant deterioration in credit conditions.
Fortunately, the darkest forecasts for the economic collapse have not worked. The unemployment rate in October was 6.1%. (an increase of only 1% on X 2019), consumer sentiment is good, and in the first three quarters of the year, the construction of 178 000 flats began, compared to 167 000 in the same period of 2019.
Agata Zambrzycka, Sales and Marketing Director at Aria Development
The fall in demand for housing is only reduced in the months when Covid-19-related restrictions are introduced. However, taking into account the whole year, sales are at a satisfactory level, better than last year.
We are seeing a surge of customers interested in smaller flats, especially in studio flats and two-room flats, but this is no more than the number of customers buying for their own housing needs. As for foreign investors, we do not see their activity in our investments.
Karolina Guzik, Sales Manager at Skanska Housing Company
Our experience shows that the demand for housing is stable and remains at a very good level. Buyers continue to actively look for their dream place to live and still believe that buying property is a good and safe capital investment.
However, by observing and analysing the situation closely, I can say that the new reality has influenced the investment buyers’ slightly greater caution. In their case, demand is also stable, but the dynamics have changed noticeably. Of course, this is a natural consequence of a more conservative attitude on the part of customers who care about investment purchases. After all, it is a group of buyers planning to buy their second or next flat.
Wojciech Dzioba, CEO of TBV Investment
In 2020, we saw a decline in interest in buying our homes only in late March/April during the government’s lockdown. At that time, a mood of investment uncertainty was actually prevailing, related, among other things, to unclear requirements of banks regarding the conditions of obtaining mortgage loans. Moreover, at that time we did not yet have as many remote selling tools as we have today, and customers also needed time to get used to a more non-contact process of dealing with their flat purchases. Already at the end of April the sale of our flats returned to the pre-pandemic level.
More and more of our customers are buying flats for investment purposes, which does not surprise us at all, because in the current situation, placing cash in real estate is a very reasonable idea. TBV investments have been in the circle of interest of foreign clients for years. In recent months we have been making transactions with investors from such countries as the United States, South Africa, the Emirates, Norway, Germany, Austria, Switzerland and Ukraine.
Edyta Kołodziej, Sales and Marketing Director at Nickel Development
Looking at the period from March this year to today, starting in June, we see a dynamic increase in the number of enquiries. In Poznań, prices are rising steadily and, according to our observations, this does not affect the demand. The increases are accepted by our customers. Indeed, we have noted increased activity of investors buying flats and flats in ST_ART Piątkowo. They already make up over 60% of the buyers. It is also interesting that the interest of individual investors in our suburban location of the Duchess of Dąbrówka Housing Estate has significantly increased. So far, they have constituted a negligible percentage in this area. Recently, however, their interest in flats with large terraces, balconies or gardens is clearly visible not only within the city limits. Undoubtedly, this is determined by the competitive price of flats compared to the prices of flats in Poznań.
Sylwester Śniadecki, President of the Management Board Śniadecki Development and Śniadecki Investment Group
We have been observing interest in real estate as an investment for a long time, although this year even more people have appeared on the market looking for alternative methods of investing capital. Thanks to the group investment option offered by the Śniadecki Investment Group, the possibility of entering the developer’s world has significantly expanded. In addition to buyers who invest in flats, we observe an influx of investors with capital of PLN 100,000 or more, who want to invest passively without getting involved in particular processes related to the construction and sale of flats or houses. Among those interested in our real estate there are also Germans.
Mariola Żak, Sales and Marketing Director of Aurec Home
The sale of flats in our first Warsaw project, Miasteczko Jutrzenki, started in mid-July this year. In the first stage of construction we offer 163 flats, of which we have already sold over half. Our experience shows that the demand for flats is not weakening. The majority of buyers are singles and families, for whom a flat in Miasteczko Jutrzenki will be their first home. There are also people buying 3-4 flats for investment purposes. Interviews with them show that the flats in our investment constitute a good, long-term investment.
Janusz Miller, Sales and Marketing Director of Home Invest
As far as the reintroduction of economic restrictions is concerned, we have not currently noticed their impact on demand for housing. The current situation is different from that of the lockdown in the spring. At the time we had a total restriction on movement, and now it is not, so customers are happy to buy flats. Despite rising prices, buying property is still one of the best and safest options for capital investment. This trend has been continuing for several months now, but has clearly increased since March this year.