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real estate. The development market “almost stopped”. “This is a dangerous situation”

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We will talk about a decrease in sales not because customers do not buy, but because there will be nothing to sell, said Dorota Jarodzka-Śródka, chairwoman of the Council of the Polish Association of Developers. She added that developers are suspending investments, the effects of this in the form of a lack of apartments will be seen in 2 years.

On Tuesday, the developer industry organization presented the “Fundamentals of the Future” report, which analyzes possible market development scenarios, identifies future trends and threats. The report sees opportunities for in the development of medium-sized cities, as well as increasing the role of public transport, energy-efficient construction and modular construction. – It seems to us that the cure for anxiety related to the crisis that the industry is entering is a conversation about how decisions made today, solutions sought today, housing programs implemented or not implemented, will affect the market – said co-author of the report Kacper Nosarzewski, partner in 4CF.

The market “almost stopped”

The chairwoman of the Council of the Polish Association of Developers, Dorota Jarodzka-Śródka, stressed that the development market has “almost stopped” at present. – Investors either finish the construction they have started, or if they are to start new constructions, they measure their strength for intentions, look at who will be a potential customer, and at the moment a potential customer is someone who has creditworthiness – she said. Meanwhile, she added, currently the creditworthiness allows the purchase of 45-50 sq m. – This is a dangerous situation, because it may distort the structure of the apartments that are being built. As a rule, development estates were designed with the fact that we have apartments of various sizes, therefore we have diverse residents, many generations. There is a danger that you will go into such a monoculture – assessed Jarodzka-Śródka. She pointed out that the KNF’s decisions on creditworthiness together with the announced government program are now of key importance.

Sensitizing the industry to various threats

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The Chairwoman of the PZFD Council announced that in 2022, the sale of developers decreased by approx. 40 percent year on year. When asked if she is not afraid of the bankruptcy of development companies and consolidation movements, she pointed out that the prepared report on medium-term development prospects is to sensitize the industries to various threats, to avoid making mistakes. – Depending on the state of the company, CEOs and owners make decisions to stay on the market, but it may diversify a bit. Larger companies are thinking about setting up a platform of apartments for rent. Smaller developers do not start new investments because they do not want to lead to a situation in which they make certain commitments that they will not be able to fulfill, she said. She pointed out that the development industry in Poland has already gone through two crises and already knows how to react. – However, we do not hide that the situation on the labor market as such is difficult and we believe that with the support of wise government programs, many people will be able to continue to enjoy work – she said. – The development investments that were supposed to be started have not started. We will see the effects of this in 2 years, because the cycle of construction, design and commissioning is long. So we will talk about a decrease in sales not because customers do not buy, but about a decrease in sales because there will be nothing to sell, she assessed.

“Safe credit” program

Dorota Jarodzka-Śródka noticed that the “Safe Loan” program announced by the government is a bit like the “Family on its own” program, with the difference that it will not set limits on the price of apartments, but the total amount of the loan. – We are counting on some revival in our sales, if the program is introduced – announced Jarodzka-Śródka. She informed that the industry will also analyze the impact of the announced changes to the regulations on the technical conditions of buildings, e.g. on the final price of a flat and urban and suburban development. The development ministry announced increasing the distance of blocks from the plot borders from 4 m to 6 m and increasing the distance between balconies.

Read also: “They know the seller needs them. Two years ago it was the other way around”

Main photo source: Shutterstock

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