POLAND Fear makes cowards of us all - and this could have been said of residential developers after summarising their results for Q1 this year. The beginning of 2012 saw the introduction of the ?S' recommendation to the market, which was supposed to turn off the mortgage taps and lower the price limits for apartments included in the Family's Own Home programme. However, developers listed on the Warsaw Stock Exchange only achieved sales similar to those in Q1 2011. In total they found buyers for over 1,400 apartments. According to Reas' figures, the number of transactions on the six major markets (Warsaw, Poznań, Wrocław, Kraków, the TriCity and Łódź) grew by just under 2 pct over Q1, amounting to just over 7,500 apartments. "Admittedly, this was 5.5 pct less than a year earlier, but the result should still be considered a very good one," declares Katarzyna Kuniewicz, the director of market research and analysis at Reas.
Stability and improvement
One of the biggest companies in the sector, Dom Development, sold around 370 apartments in Q1 - slightly less than in the same period in 2011, when 399 apartments found buyers. Polnord also registered a decrease: after selling 289 apartments in Q1 2011 it saw this figure fall in the first three months of 2012 to 266 apartments. Robyg, however, has seen a small improvement in its sales results - from ?292 apartments sold in Q1 2011 to 301 in the same period this year. "In the first quarter of 2012, J.W. Construction Holding sold 206 apartments. Taking into consideration that we are currently in a wait-and-see situation on the market, we decided not to extend our offer with any new residential projects and concentrated instead on the preparation of projects that will secure our sales when the market revives," reveals Tomasz Panabażys, vice-president of the management board of J.W. Construction Holding. The company has instead been increasing its operations on the commercial market, which is to play an increasingly important role in the company's revenue structure - unsurprisingly, considering that in the last quarter the developer had considerably fewer buyers than the 370 in Q1 2011. "Media reports about the decreasing financial capacity have led moderately wealthy Poles to lose faith in being able to afford their own apartments. Nonetheless, our offer includes a lot of apartments which comply with the limits that have been in force since April 1st. The future of the market depends to a large extent on whether the government offers some form of support for residential development other than the Family's Own Home scheme," adds the vice-president of?J.W. Construction Holding. Ronson is another residential developer than has suffered weaker results. In the first three months of the year the company sold 97 apartments (compared to 132 in the same period last year).
Personal bests
"Paradoxically the anxiety felt by buyers and developers due to the new mortgage rules under the Family's Own Home programme has had a positive impact on sales in the second half of Q1. Moreover in most cities the new price limits introduced at the beginning of April turned out to be considerably lower than the previous ones and merely reduced the already small number of apartments qualifying for a mortgage based on this programme. Also the size and variety of the apartment offer had a positive influence on sales, as well as the price flexibility of sellers. Every quarter the market becomes more and more competitive," claims Katarzyna Kuniewicz of Reas. Both capital city-based Marvipol and Lublin-based Wikana recorded the best results in their histories in the first quarter. Admittedly, Marvipol only sold four more apartments than in the same period of 2011, but selling 119 is a still a good result. Wikana can boast an increase in sales of as much as 100 pct, with 88 apartments sold. The company is planning to maintain this sales pace and to find buyers for 340 apartments by the end of the year.
Still building
According to a recent report by Emmerson, in the first quarter the supply of new apartments increased in five out of the seven main residential markets, which include Warsaw, Kraków, Łódź, Wrocław, Poznań, the TriCity and Katowice. Compared to the final quarter of last year, Łódź saw the highest growth in supply (12.7 pct), followed by Kraków (8 pct) and Wrocław (6.8 pct). In Warsaw, 3.3 pct more apartments were completed. The greater supply is also contributing to a decrease in prices. According to Emmerson's research, prices continued to fall - although not significantly - in most large cities. In the capital city the price per sqm fell by around PLN 100 to app. PLN 8,300. In Wrocław, Gdańsk and Katowice the decline amounted to app. PLN 70. Minimal increases were only occurred in Poznań and Kraków, where the average price in the former city is now around PLN 6,600 and around PLN 6,900 in the latter.
