Poland: How do housing developers assess the new building regulations?
How will the new regulation governing the design of small flats and the location of buildings on the plot affect the market? How much development will need to be redesigned? How will this translate into the supply of studios and the profitability of projects?
Angelika Kliś, board member of Atal S.A..
We are monitoring the planned changes on an ongoing basis and take them into account in the projects in which we "fall" into this period with the implementation according to the schedules. Certainly, the changes will affect the supply of studio flats, being a disadvantageous factor for developers specialising mainly in the construction of the so-called aparthotels, where units could be smaller than 25 sqm.
We have only a few per cent supply of commercial units, meeting current and future regulations, so this will not be too noticeable for us. Certainly, the profitability of the projects will be affected by the other new regulations, as on the already purchased sites the investments were calculated according to the current parameters. All of this will have an impact on costs and, as a result, may lead to increases in housing prices.
Tomasz Kaleta, Sales Department Director, Develia S.A.
The new regulations will apply to planned projects that have not yet obtained a building permit decision. Where these decisions are already issued, the existing conditions will apply. However, it should be borne in mind that it is not uncommon for several years to pass between the decision to purchase a given land and the obtaining of a building permit. Therefore, the entry into force of the new regulations on technical conditions may hit some development investments, forcing a radical change in their shape, which will directly affect the profitability of these projects and, in extreme cases, even make their implementation impossible.
We attach great importance to the quality with which our estates are designed, hence many of the solutions sanctioned by the new regulations are already in our standards, such as striving for plenty of greenery, attractive playgrounds or permanently separated balconies.
We understand the intentions of Minister Waldemar Buda to reduce pathological behaviour in the property development market. However, these are incidental cases. When amending the technical conditions, healthy moderation should be exercised so that unnecessary restrictions do not further increase the price of projects and thus reduce their availability.
Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction.
We are in favour of smart and well-designed changes. Of course, the new regulations will certainly increase the daily comfort of residents. Nevertheless, we feel that each investment should be considered in slightly different terms. The issue of the obligatory playground can serve as an example. In our opinion, it is not always necessary, especially when, for example, the building is adjacent to a park full of playgrounds. In addition, some customers indicate in advance that they are looking for a flat in a building without a playground. So we need to consider who the investment is aimed at.
As far as our current investments are concerned, we should be able to obtain planning permission before April 2024. However, looking at the bigger picture and taking into account how labour-intensive and time-consuming it is to prepare an investment, there is really little time to make changes and possibly redesign, even after extending the deadline by three months. This could have a negative impact on many developers and, consequently, on supply.
As far as customers are concerned, the new changes will provide them with a more comfortable living environment, but this will come at the expense of an increase in housing prices. This is due to the fact that the new developments will total less m2 of flats themselves. The cost of land per unit will therefore be higher.
Andrzej Gutowski, vice-president, sales director of Ronson Development
The proposed regulations are aimed at improving the comfort of living in multifamily buildings by, among other things, increasing space and getting out of the congestion that is particularly characteristic of large agglomerations. While we agree with the attempts to regulate these issues, as an industry we are pleased that the vacatio legis has been extended by at least a few months. Although, in the context of planning and realising investments in a 2-3 year perspective, it is not a complete rescue. I am particularly referring to the context of administrative procedures, which are very often protracted and extended by several to several months. It may be that developers who bought plots of land in Q3 2023 will not manage to obtain the relevant permits in time.
As for the need to possibly redesign the development, I assume that all developers are currently checking these issues, also in terms of the profitability of the investment. However, the changes to the regulations themselves will not affect the supply of studio flats.
Cezary Grabowski, Sales and Marketing Director of Bouygues Immoblier Polska
The idea behind the new regulations is to increase the comfort of residents. However, one should be aware that the investment process lasts 2 to 3 years, so in 2024 there will still be projects developed in accordance with the regulations in force until April. This is because in the whole process, the date of submission of the application for a building permit is crucial, so here we can expect that developers in the first three months of next year will be submitting documents for such permits en masse. The whole industry would, of course, like to have more time to implement all the guidelines, so for us the April deadline is a very ambitious prospect.
Mariola Żak, Sales and Marketing Director at Aurec Home
The regulation on the technical conditions to be met by buildings and their location, signed by the Minister of Development and Technology Waldemar Buda, is one of the most important regulations governing the construction of buildings. For purchasers of premises, the new regulations are beneficial, above all they provide greater comfort of living. Certainly, the property development industry must have time to prepare for the new regulations, as hundreds of investments bringing tens of thousands of units to the market may be at risk.
It is worth bearing in mind that, in connection with the draft new technical regulations, construction costs will increase and, at the same time, the area of properties for sale will decrease, as new developments will offer fewer square metres of flats. Developers may compensate for this by raising the prices of units. These changes will most affect small developments, which rarely envisaged, for example, the construction of a playground or a bicycle room. In addition, some developers may abandon projects, considering that they will not be profitable.
Anna Bieńko, Sales Director at Wawel Service
For flat buyers, some of the proposed changes are obviously beneficial in terms of living comfort. However, the introduction of the new regulations may force developers to redesign their developments or adapt them to the new requirements, which may translate into price increases and delays in project implementation. The dilution of development may also result in some plots simply not being able to be built on.
Dawid Wrona, board member at Archicom
The entry into force of the amendment to the regulation on technical conditions, i.e. the change in the regulations concerning the design of properties and the location of buildings on a given plot, will undoubtedly contribute to a review of how development companies have approached the subject of designing investments so far. Certainly, some projects on the market will need to be modified to comply with the new regulations.
The idea of introducing regulations limiting construction abuses is absolutely right. The quality of life of our residents has always been a top priority for us, so we are already in line with the announced amendment to the regulation. We create city-building projects in which we analyse at every step how to complement the current urban fabric with new developments and how to create a friendly place to live, work or meet.
Damian Tomasik, founder of Alter Investment
When dealing with such changes, the situation always needs to be looked at from a multifaceted perspective. The first issue is the rationality of the changes introduced and the purpose of the changes. The first perception is that the changes introduced are positive. But are they really? From the perspective of both developed Western markets and our own market, which is only just starting to develop in this segment, the design of collective housing with statutory minimum floor space is not an optimal solution. The occupants of such dwellings often do not regard them as their main and ultimate place of residence. For this reason alone, they do not need as much space as a residential unit.
The second major change, specifying an increased distance from the plot boundary, combined with the short deadline for this change to come into force, is also extremely unconvincing. When the majority of projects take several years to prepare and regulations which significantly change the possibilities of development are introduced within months and there is no possibility to prepare for this, the situation for investors and all participants in this process is very unfavourable. As a consequence of such surprising changes, a lot of land, especially smaller, well-located land, may lose up to 50 per cent of its value. With a limited supply of land and a shortage of housing, one should always act prudently and rationally with regard to such, presumably necessary and progressive legislative changes. Otherwise, they may do more harm than good.
Source: dompress.pl
Photo: NOW Dowborczykow - Okam
