Poland: How the government can improve the housing market

What decisions would the new government think would be most effective for developers to accelerate the pace of housing construction and increase the very low supply? How will the housing market develop further?

Tomasz Kaleta, Sales Department Director, Develia S.A.
The topic of housing reform is in the media on a fairly regular basis, and was often mentioned during the recent election campaign. It is not uncommon for the much heralded programmes to come to nothing, as the example of Mieszkania + shows. This is why we approach the announcements made by politicians, including the introduction of zero-interest mortgages, with caution. Improving the purchasing capacity of Poles will change nothing if they are unable to find suitable housing on the market.

Currently, the biggest problem is the low supply of units. In Poland's six largest cities, developers have around 35,000 units on sale, the least since 2010. Stimulating demand with subsidies, in the absence of adequate supply stimuli, may end up with the offer being sold out and rapid price increases, as we are currently observing. There is only one way to reverse this trend, by increasing the offer of units on the market.
We support any ideas that will allow us to build more, such as the sale to developers of land owned by state-owned companies or the simplification of administrative procedures when issuing approvals and permits for new projects. The largest property developers have extensive land banks, but due to the slow work of the authorities, it takes on average about two years to obtain a building permit, they are not able to launch new investments on them at a fast pace.

Zuzanna Należyta, commercial director at Eco Classic.
The biggest influence on the development of the residential market is the availability of credit and the supply of land. Credit availability does not need to be increased through government programmes if lending rates are at a low level. What is most detrimental to buyers is the imbalance between supply and demand, which is what we are currently experiencing. The 2% Secure Credit programme has resulted in a significant increase in demand, but this has not been followed by an increase in supply. And this is because of the long investment process, to which official procedures also contribute, and we also have a problem with land availability. There are still many areas not covered by local plans, a huge amount of land planned for the Housing + programme is still frozen. Last year, many developers stopped their investments, while their start-ups are ongoing. Limited supply and increased demand means that we are facing price increases.

The availability of housing and limiting price increases can be ensured by an increase in land availability, a decrease in inflation and interest rates, and government programmes, but for example based on tax breaks for, for example, people who buy their first or larger flat due to family enlargement.

Andrzej Gutowski, Vice-President, Sales Director Ronson Development.
We are against all short-term boosters in the form of support programmes that work only on the demand side and are dedicated only to a limited group of customers. For many years, we have been calling for the creation of a strategy that would comprehensively cover housing issues in Poland - a long-term housing strategy for the country.

We are convinced that supporting only the demand side with subsidy-based programmes may look good in the public perception, but in the long term it brings effects such as the one resulting from the 2% Safe Credit programme, i.e. a sharp increase in property prices.

The industry cares about balancing support and even more about stimulating supply on the local government side. I am referring to the creation of zoning plans, clear regulations, or a clear policy for the reinforcement of plots of land, or the support of local authorities in terms of, for example, the construction of local roads. A very important demand, which has been raised for years, is also the release of land that currently belongs to the State Treasury.

Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction.
We all know that the housing market is facing many problems. We are counting on the new government to solve at least some of them. First and foremost, it is worth taking care of young people, who find it difficult to buy their own home in times of economic turmoil. However, these should be long-term, well-considered solutions.
During the campaign, the idea of the 0% Loan appeared. This may be a good idea, but it requires preparation, as it will certainly drive the market even harder than the 2% Secure Loan. Let us therefore start by working on the ground and preparing the ground for change. And I mean that literally. It would be worthwhile for the new government to solve the very pressing problem of the housing gap caused by the low supply of land. The announced release of land from the National Property Stock base would be a good solution here.
We also place our hopes in the provisions for new land use plans. Another important issue is to streamline the implementation of investments on this limited pool of land, which is currently in land banks owned by developers. This requires simplifying administrative procedures and streamlining the work of offices.

Angelika Kliś, Atal S.A. board member.
We do not yet know how the new government will proceed on housing issues. This is because the parties forming the coalition differ in their approach to this topic, and in the broad spectrum of ideas we will find both liberal and pro-social ideas. Moreover, it will take time before political decisions are translated into concrete solutions. We would certainly like to see them result in the release of land remaining in the State's stock, as well as in the simplification of administrative procedures.

We also see positive effects of the programme of credit subsidies and, looking more broadly, all forms of support for young people in financing their first flat. We also hope that the new political scene in Poland will encourage more commercial banks to cooperate with government programmes.

Bartosz Kuźniar, CEO of Lokum Deweloper.
Poland needs a clear, long-term housing policy. In order to create it, the government should hold broad consultations, including with developers - the entities on which housing construction in Poland is based today. Solutions are needed which, on the one hand, will make it easier for customers to purchase housing, such as the quite good 2% Safe Credit programme, and, on the other hand, will simplify the process of obtaining building permits - so that demand meets supply.

Currently, the main barriers to increased housing production are the declining availability of land, the lack of local development plans and the high cost of development. All these factors make the overall high cost of housing production a major barrier to launching new developments, as buyers find it difficult to accept higher housing prices. Streamlining administrative processes should reduce costs. A good solution to jump-start the amount of housing in a given market is the use of the housing specs law. However, it should be amended so that issues such as parking space ratios per dwelling or density, the use of inner city development, are left in the hands of city councillors who best understand local needs in this area. Appropriate legislation that streamlines the housing production process and allows for an increase in supply can have an impact on stemming the rise in housing prices. At the same time, customer support programmes for the purchase of housing should be maintained and new ones implemented to make it easier to finance the purchase.

Joanna Chojecka, sales and marketing director for Warsaw and Wrocław at Robyg Group.
Past experience in many countries has shown that the government should be active in legislating and regulating to enable the free economy to operate effectively. In most Western European countries, the government is withdrawing from being a direct participant in the property development market, in favour of overseeing the sector.

On the other hand, both state and local administrations should facilitate procedures as much as possible - so that construction can be carried out as efficiently as possible. This is an area that should certainly be improved. Of course, the government should also make it as easy as possible for citizens to purchase their first home. This is an essential element for a sense of security, to promote population growth and economic growth. Therefore, any programme, including easily accessible and low-interest loans, should be a permanent element of support for its citizens and government programmes.

Damian Tomasik, founder of Alter Investment.
What impact the political turnaround will have we will be able to fully assess in a few years. For our sector to grow in order to close the housing gap, three things are needed first and foremost. Firstly, a predictable government that rationally prepares all changes and adapts them to the market.

Secondly, there needs to be an increased supply of new land for multi-family housing, which is most lacking in large cities. As a result of releasing land, the supply gap could be met and spikes in property prices, including housing, could be stopped.

The third issue is to streamline administrative procedures to prepare land for future developer investments. In many institutions, simple matters are often dragged out for months without any substantive necessity. This also directly affects the limited supply of flats and, consequently, price spikes.

Source: dompress.pl
Photo: Enklawa Ursynow - Home Invest