Poland: Will proposals from both sides of the political spectrum serve to improve the housing market

What support does the housing sector expect. Will proposals from both sides of the political spectrum serve to improve the housing market and make it easier to buy homes? What legislative measures do developers believe are likely to realistically revive the market? What would effectively increase demand and supply? What assistance does the industry need?

Tomasz Kaleta, director of the Sales Department at Develia S.A..:
One of the main challenges currently faced by residential developers in our country is the decline in demand among customers using mortgages. As a result of interest rate increases, many potential buyers have lost their creditworthiness or had it significantly reduced. Therefore, we support all forms of state assistance that can improve the situation of this group of people. Thanks to the "2% Safe Credit" solution, which operates within the framework of the government's "First Apartment" program, some of them will be able to realize their housing plans. We are seeing a lot of interest in this form of support and are informing our customers about the possibility of taking advantage of mortgage subsidies.

Like the government side, we expect the new program to be popular. According to legislators' estimates, up to 155,000 loans for a total of PLN 52.8 billion may be granted under the action by 2027. The operation of the program will help revive both the demand and supply sides. With a steady flow of customers with bank financing, developers will be able to unfreeze investments that have been put on hold in recent quarters due to credit capacity constraints. The positive impact will be felt by a wide range of industries, from general contractors to manufacturers of building and finishing materials to suppliers of household appliances, furniture and consumer electronics.

Angelika Kliś, Atal board member:
Certainly, however, support programs for the purchase of apartments are necessary, and they have so far been the most effective in helping Poles purchase real estate for their own housing purposes, as was the case with the Family on its Own or Housing for the Young. These types of programs not only satisfied Poles' housing needs, but also facilitated their capital accumulation, as the apartments would eventually pass into their ownership.
Today, creditworthiness remains the biggest challenge, so the new program should be an answer to this problem. A 2% interest rate could increase the creditworthiness calculated by banks. More accessible mortgages would expand the group of buyers who would have the opportunity to acquire a unit on their own. This would have a positive impact on Polish manufacturers and the entire construction and development sector.

Credit availability is one thing, but there is another side - the cost of financing construction. The higher the rates, the higher the cost of financing. The higher the cost of financing, the more expensive housing.

There is still a shortage of apartments in Poland, various analyses put the number at between 1 and 3 million units. In terms of apartment space per capita, Poland falls far below the EU average. The housing program should redistribute funds to the most vulnerable group of buyers - primarily families, to support them in buying their first apartment or replacing their current one with a larger unit, e.g. due to a decision to expand the family.

Małgorzata Ostrowska, director of the Marketing and Sales Division at J.W. Construction Holding S.A.:
Increases in interest rates have stifled the mortgage market and, consequently, the demand for apartments purchased for own use. The housing market is dominated by cash buyers and affluent individuals who buy high-standard apartments in attractive locations. For example, in Hanza Tower in Szczecin we sold 480 residential apartments, and among buyers only a few people used credit. Such a situation proves that it is not developers who need solutions for the market to recover, but consumers.

Joanna Chojecka, sales and marketing director for Warsaw and Wroclaw at Robyg Group:
Government programs will certainly be an important support for Poles and will make it easier for them to invest in their own dwelling. For example, the First Apartment program, which is intended to help young people finance the purchase of their first apartment or house, or Housing without own contribution. Support can also be provided by planned financial solutions: a low-cost loan with government subsidies and a special savings account. It's important that these programs, already adopted by the government, will have such a broad coverage for people under 45 and married couples, with no limit on the price per square meter. As a result, the residential real estate market will recover very quickly, and Poles will be able to realize the needs for their own housing.

An additional factor supporting borrowers will be the recent decision of the FSC. The Financial Supervision Authority has relaxed the conditions for assessing creditworthiness. According to the KNF's decision, the lowest, minimum buffer level of 2.5 percentage points should apply to loans with a temporarily fixed interest rate. This means that credit availability will increase. It is also very important to speed up administrative procedures, i.e. the issuance of permits by local governments. Paperwork processing times have increased sharply since the pandemic. This makes customers have to wait longer for apartments, reduces supply and increases price pressure.

Andrzej Gutowski, vice president, sales director of Ronson Development:
All government programs are currently aimed at stimulating demand, meanwhile the housing sector needs support on the supply side. Strengthening demand with an inadequate supply of housing can result in further price increases and worsening affordability. For a long time, we have been paying attention, for example, to prolonged administrative procedures or the low availability of land in major cities, which translates into their prices, then the prices of apartments, and ultimately severely limits the possibility of acquiring one's own M.

Zuzanna Należyta, Commercial Director at Eco Classic:
A good, well-thought-out program such as Housing for the Young would certainly support housing construction and the availability of homeownership. Various ideas are being floated at the moment, but there are no concrete ideas.

Damian Tomasik, founder of Alter Investment:
I would not like to comment on the promises of politicians j made de facto during the election campaign, especially since they are rather just slogans without specifics. If I were to say what kind of help the sector needs, it would be, first of all, the stabilization of regulations, so that the industry is not constantly surprised by new ideas of those in power, which instead of supporting housing construction cause chaos and halting of investments or prolongation of already started ones, which only raises costs and reduces the availability of housing. If we are to fill the housing shortage gap, which according to some estimates reaches as many as 2 million units in our country, so that everyone has the opportunity to live in civilized conditions, a predictable, stable and transparent legal system is needed. Only this will allow planning the investment process and a steady increase in the number of investments.

As a rule, the implementation of an entire investment project in this sector takes 4 - 6 years. Just obtaining the numerous administrative arrangements and decisions necessary for a construction permit takes years. This is because the administrative procedures in force allow, and in some cases even force the public authorities and other entities involved in the process to process such matters in an excessively meticulous, non-substantive and thus extremely lengthy manner, with a tendency to further lengthen in the last 2-3 years. Simplifying these procedures, making them more rational and friendly would certainly streamline and speed up the entire proceedings considerably. Consequently, it would promote a reduction in the demand gap and also act as a factor stabilizing the market and counteracting the increase in housing prices.

Wojciech Chotkowski, CEO of Aria Development:
The most important thing is to solve the problem of lack of housing availability especially for young people. Currently, they often have to give half their salary to rent an apartment. It is also necessary to have state support and a reasonable credit policy, especially for young people who buy their first apartment on the primary market. There is still a massive housing shortage in Poland. With reasonable land prices, developer investments will be able to get back on the growth path. We will welcome solutions that are real support for the real estate development industry, no matter from which side of the political scene they come.

Sebastian Barandziak, CEO of Dekpol Developer:
The ideas presented directly from the political scene mainly include solutions related to increasing purchasing opportunities through credit programs and are dedicated to about 10,000 people. The housing gap in Poland oscillates at about 2 million units, and in 2022 about 2.4 thousand residential buildings were put into use. At this scale, the proposed assistance does not seem large. It will raise the level of sales, but slightly due to the aforementioned scale. What could help the market? Measures to stimulate supply, increase access to land for developers, including land after deteriorating facilities.

Source: The poll was prepared by the real estate website dompress.pl.
Image: Orawska Vita - Develia