Poland: Will the new building regulations affect housing prices
Will the new regulations on the construction of flats, obliging, among other things, the construction of a playground in each development and a greater dilution of the development, raise the cost of projects? How do developers assess them? Will the regulations, which will take effect from 1.August this year, contribute to an increase in housing prices?
Tomasz Kaleta, managing director of sales and marketing at Develia:
As a responsible developer, we support changes improving the comfort of residents. Nevertheless, their introduction is connected with many consequences, both for developers and customers, so we believe that healthy moderation should be maintained and each project should be approached individually. An example of this is the requirement for a playground in every development, which we view negatively. Not every project is built with families with young children in mind, and unfortunately the proximity of a playground can discourage a certain group of customers. We do not support this provision especially for developments located close to public playgrounds, where our preferred solution would be to increase green zones.
Furthermore, it should be borne in mind that regularly raising the requirements for developers will increase construction costs and thus the price of housing. At the moment, we are launching projects for which administrative decisions were issued according to the old regulations, so the impact of the new technical conditions on the prices of flats will only be visible in about 1-2 years.
Zuzanna Należyta, commercial director at Eco Classic:
The new regulations mean that in a project built on the same plot of land on the basis of a design submitted after 1 August this year, it will be possible to build about 20 per cent less space, and consequently prices will have to be higher. This is an example of changes to the regulations ‘for the public’ which are not well thought out and will only result in a further reduction in supply.
Smaller buildings in old buildings do not have playgrounds and it is the role of cities to provide them in city parks rather than passing the costs on to developers and, realistically, to customers.
Małgorzata Ostrowska, Director of the Marketing and Sales Division at J.W. Construction:
We are ready for the new regulations. On the one hand, they will affect the comfort of residents, but on the other hand, they may actually translate into price increases in new projects. The new developments will have fewer m2 of flats in total, so the cost of land per unit will be higher. It is worth stressing, however, that this will not be the case for all developments. It all depends on the size of the plot and planning conditions, biologically active area.
For example, on one of our newly designed properties in Warsaw's Białołęka district, after taking into account the new rules, there is no difference in the area of flats, while on another the amount of residential space has decreased by more than 30 per cent.
Anita Makowska, Senior Business Analyst at Archicom:
It is difficult to comment unequivocally on the new playground requirements without highlighting urban, social and design considerations. We feel that they bring with them many positive aspects, but at the same time pose some challenges for developers. One of the key questions that arises in the context of the new regulations is the issue of costs and the impact of the regulations on property prices. It is important to remember that the cost of building playgrounds in urban areas is much higher than in suburban areas, both financially and socially. For we are talking, not only about higher land prices, but also about the loss of living space, complicated design processes, compromises in spatial planning and, ultimately, the high costs of operating and maintaining the playgrounds, which already directly affect residents.
The new regulations require that playgrounds are adapted to children of different ages and with special needs. This requires a redefinition of the concept of these places in order to make them more flexible in their functionality and extend their period of use.
An additional design challenge is to maintain a minimum of 30 per cent biologically active area, which requires an innovative approach to green maintenance. Another is the certification of facilities, which can be lengthy and costly. With the introduction of the new regulations, the amenity of a playground on a housing estate will no longer be the ‘bargaining chip’ of a development. Instead, it can be an original and interesting design. There will undoubtedly also be a group of customers looking for a flat on a housing estate without a playground, which will then be more difficult to access. The issue of playgrounds filling up over the years and their usefulness in the long term should be considered, taking into account the demographic structure in Poland. The diverse demographic cross-section in housing estates means that recreation zones should grow and evolve with residents, adapting to their changing needs.
Mateusz Bromboszcz, vice-president of Atal:
We are prepared for the new building rules, as they have been known for more than six months. We have taken them into account in our plans. Nevertheless, every change of this kind, to a greater or lesser extent, requires an update of the projects being developed. By the way, this is not the only recent legislative change that affects the activities of developers and the design and construction sphere. In this respect, the situation in Poland is very dynamic, and the pace of enacting and amending legislation has been fast in the past years. We have to keep up with them, although this is not conducive to optimal planning and preparation of investments.
The process from the purchase of a plot of land to the commencement of a given investment can take up to five years, which is often caused by waiting too long for an official decision. Meanwhile, the changes in question take place in just about a year.
It is difficult to expect further regulations or restrictions, especially those mandating the dilution of development, to have a positive impact on the developer business. On the other hand, the price of a flat consists primarily of the costs associated with purchasing a plot of land, equipping it with the necessary networks and the cost of the construction itself. While this third component has recently stabilised nationwide, the main problem facing the industry is the limited availability of land in adequate locations for multi-family housing.
Mariola Żak, sales and marketing director at Aurec Home:
I see the introduction of new building regulations changing the rules for the location of buildings and mandating the construction of playgrounds in each development as a step towards improving the quality of life for residents. Increasing the distance of buildings from the plot boundary will result in more diluted development, which may improve the aesthetics of the space and the comfort of living, as well as provide better sunlight and ventilation conditions.
However, these changes will undoubtedly have a significant impact on the property market. More diluted development means fewer buildings and dwellings can be built on a given plot of land, which will affect supply. Reduced housing supply, coupled with the rising cost of delivering additional requirements such as playgrounds, is likely to drive up the price of new properties.
It is estimated that housing prices could increase by around 5-10 per cent, depending on the location and scale of the development. The impact of these changes will be particularly felt in large cities, where land prices are high and the availability of new plots is limited. The final price increase will depend on a number of factors, including the cost of construction, demand for housing and developers' strategies in response to the new regulations.
Joanna Chojecka, sales and marketing director for Warsaw and Wrocław at Robyg Group:
We have been meeting the most demanding residential construction guidelines for years. The new regulations will not affect our business. We have a secured land bank for over 25,000 flats, so the planning reform issues will not affect our current operations.
Andrzej Gutowski, vice-president, director of the Sales Department of Ronson Development:
We carefully analyse the impact of the introduced regulations on our projects, while we try to adapt to the changing conditions and requirements of the market, taking care of the highest quality of our investments and customer satisfaction. In our opinion, the proposed regulations will reduce the intensity of construction to some extent. This will result in the construction of smaller buildings. However, we do not anticipate that this will affect the number of flats in the development or the level of prices.
Source: dompress.pl
Photo: Okam, Inspire
