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POLAND As far as sales are concerned, some developers have not had such a good quarter since the boom of 2007. What types of companies are we talking about?
Some of you might be surprised, but it was residential developers who had to cancel their holidays to do business on a scale unheard of for several years. Residential market analysts Reas have revealed that in Q3 the number of home purchases on the six main markets (Warsaw, Kraków, Wrocław, the TriCity, Poznań and Łódź) came to 9,600. This constitutes a growth of over 18 pct on the previous quarter. In total, almost 33,500 units have been bought over the last four quarters.
Sales grow and will keep growing
“The revival of the residential market is becoming more and more evident. Buyers’ interest in our projects has not fallen over the last few months – on the contrary, we have had a continuous growth in sales. The number of reservations we have also indicates that the growth trend will continue,” comments Zbigniew Juroszek, the president of the board and owner of Atal Polska, on the company’s results for the first three quarters. During the first nine months of this year the developer sold 928 apartments (out of the total number, 536 contracts were signed in Kraków, 148 in Wrocław, 111 in Łódź, 78 in Warsaw and 55 in Katowice). This is 80 pct more than in the same period of 2012. Meanwhile Ronson, which is listed on the Warsaw Stock Exchange, enjoyed a 60 pct growth in sales. Since the beginning of the year it has found buyers for 418 apartments. In Q3 alone the company sold a net amount of 123 units, which constitutes a 32 pct growth on the figure for the same period in 2012.
Fadesa Polnord Polska has also published its sales figures. In Q3 the company signed 96 preliminary contracts and has sold a total of 260 apartments since the beginning of the year. The number of preliminary contracts signed increased by 40 pct compared to the same period last year. At the end of September the company’s debt with financial institutions amounted to PLN 49.6 mln, down from the figure of PLN 83.5 mln at the end of December 2012. The developer claims that the ratio of its net debt with banks (PLN 7.5 mln) against the total value of its assets on September 30th 2013 (PLN 380 mln) means that FPP is one of the least indebted and most financially secure enterprises in the residential sector in Poland. This cannot be said of Gant Development. A Wrocław court has appointed an administrator for the company’s assets. The ruling comes in the wake of petitions from the company’s creditors, who are demanding the liquidation bankruptcy of the company. Gant’s executive has also filed a petition for bankruptcy, but one open to arrangements. The situation with this developer, among others, is unlikely to have a positive influence on the financing of new enterprises by the banks.
Low interest rate boost
“In Q1 and Q2 2013 we observed a considerable increase in activity among clients buying with cash, whereas in Q3 the share of purchases involving a mortgage increased, closing in on the long term average of around 70 pct. The higher share of mortgage-based purchases is a result of the record low interest rates and the expected bounce in home prices. The oversupply, which was a source of strong pressure on prices for over a year, is gradually being reduced,” explains Jarosław Szanajca, the president of the board of Dom Development, who announced that in Q3 his company sold 414 apartments and a total of 1,139 in the first nine months of the year. The demand is being driven by the low interest rates and also, as Reas’ experts point out, from buyers who have been taking out 100 pct mortgages in the last few months before the government’s S3 recommendation comes into force, which will tighten the regulations for such loans.
What can we expect in 2014? Did the last few months effectively represent a bounce off the bottom? According to Reas, the ‘Mieszkanie dla Młodych’ [‘Homes for the Young’] programme will have a considerable impact on the basic standard apartment market. The scheme will involve PLN 600 mln of subsidies to own contributions for mortgages taken out on the primary market, thus fuelling the market in 2014. Developers are also highlighting that the new programme, rather like the earlier ‘Rodzina na Swoim’ [‘A Family’s Own Home’] scheme, will serve as a marketing tool. The slogan ‘We offer apartments qualifying for the MdM programme’ will attract clients who will probably look not just at these apartments but also many, many more. The market would be helped even more if there were simpler procedures and civil servants who could act more effectively – opinions expressed at ‘Developer Days’, a market integration event held by the Polish Association of Developers (PZFD) on October 2nd in Wrocław. Those assembled also discussed a different idea: the Apartments for Rent Fund, which is being set up by Bank Gospodarstwa Krajowego. The bank aims to invest PLN 5 bln in apartments in the largest cities (the first will be Warsaw, Kraków, Wrocław, Poznań, the TriCity and Łódź) and its goal is to build 20,000 homes.
Sales grow and will keep growing
“The revival of the residential market is becoming more and more evident. Buyers’ interest in our projects has not fallen over the last few months – on the contrary, we have had a continuous growth in sales. The number of reservations we have also indicates that the growth trend will continue,” comments Zbigniew Juroszek, the president of the board and owner of Atal Polska, on the company’s results for the first three quarters. During the first nine months of this year the developer sold 928 apartments (out of the total number, 536 contracts were signed in Kraków, 148 in Wrocław, 111 in Łódź, 78 in Warsaw and 55 in Katowice). This is 80 pct more than in the same period of 2012. Meanwhile Ronson, which is listed on the Warsaw Stock Exchange, enjoyed a 60 pct growth in sales. Since the beginning of the year it has found buyers for 418 apartments. In Q3 alone the company sold a net amount of 123 units, which constitutes a 32 pct growth on the figure for the same period in 2012.
Fadesa Polnord Polska has also published its sales figures. In Q3 the company signed 96 preliminary contracts and has sold a total of 260 apartments since the beginning of the year. The number of preliminary contracts signed increased by 40 pct compared to the same period last year. At the end of September the company’s debt with financial institutions amounted to PLN 49.6 mln, down from the figure of PLN 83.5 mln at the end of December 2012. The developer claims that the ratio of its net debt with banks (PLN 7.5 mln) against the total value of its assets on September 30th 2013 (PLN 380 mln) means that FPP is one of the least indebted and most financially secure enterprises in the residential sector in Poland. This cannot be said of Gant Development. A Wrocław court has appointed an administrator for the company’s assets. The ruling comes in the wake of petitions from the company’s creditors, who are demanding the liquidation bankruptcy of the company. Gant’s executive has also filed a petition for bankruptcy, but one open to arrangements. The situation with this developer, among others, is unlikely to have a positive influence on the financing of new enterprises by the banks.
Low interest rate boost
“In Q1 and Q2 2013 we observed a considerable increase in activity among clients buying with cash, whereas in Q3 the share of purchases involving a mortgage increased, closing in on the long term average of around 70 pct. The higher share of mortgage-based purchases is a result of the record low interest rates and the expected bounce in home prices. The oversupply, which was a source of strong pressure on prices for over a year, is gradually being reduced,” explains Jarosław Szanajca, the president of the board of Dom Development, who announced that in Q3 his company sold 414 apartments and a total of 1,139 in the first nine months of the year. The demand is being driven by the low interest rates and also, as Reas’ experts point out, from buyers who have been taking out 100 pct mortgages in the last few months before the government’s S3 recommendation comes into force, which will tighten the regulations for such loans.
What can we expect in 2014? Did the last few months effectively represent a bounce off the bottom? According to Reas, the ‘Mieszkanie dla Młodych’ [‘Homes for the Young’] programme will have a considerable impact on the basic standard apartment market. The scheme will involve PLN 600 mln of subsidies to own contributions for mortgages taken out on the primary market, thus fuelling the market in 2014. Developers are also highlighting that the new programme, rather like the earlier ‘Rodzina na Swoim’ [‘A Family’s Own Home’] scheme, will serve as a marketing tool. The slogan ‘We offer apartments qualifying for the MdM programme’ will attract clients who will probably look not just at these apartments but also many, many more. The market would be helped even more if there were simpler procedures and civil servants who could act more effectively – opinions expressed at ‘Developer Days’, a market integration event held by the Polish Association of Developers (PZFD) on October 2nd in Wrocław. Those assembled also discussed a different idea: the Apartments for Rent Fund, which is being set up by Bank Gospodarstwa Krajowego. The bank aims to invest PLN 5 bln in apartments in the largest cities (the first will be Warsaw, Kraków, Wrocław, Poznań, the TriCity and Łódź) and its goal is to build 20,000 homes.
