Development industry representatives oppose and argue this approach High profits are only on paper. They also point out what they consider to be the biggest myths in the report.
According to the report's authors One of the most common beliefs, but not consistent with reality, is the size of the profits of development companiesWhich is claimed to sometimes reach more than 30 or even 40 percent. These are the gross margins quoted by listed development companies. Meanwhile, according to Dr. Habb. Adam Czerniak, economist and research director at analytical center Politika Insight, the developer's actual profit is different.
— Gross margin does not include other costsincurred by the developer in connection with the implementation of the investment, i.e. sales and management costs and, above all, interest on capital borrowed to finance the construction. This is also a pre-tax amount. Only after these deductions can we talk about the final result for the developer, i.e. net margin – explained Dr. Happ. Adam Cherniak.
This value, i.e. the net margin, is what arrives On average less than 15 percent – It is the developer’s profit from a product that takes about five years to manufacture.
Developers about the development path
Another myth pointed out in the report of the Polish Association of Developers is the belief that small apartments are being built in Poland. He quotes an analysis by the Polish Economic Institute that makes this clear In the third quarter of 2023, less than 2%. Apartments for sale in 16 regional cities of Gdynia with an area of less than 25 square meters. One and a half million small studio apartments were built during the time of the Polish People's Republic.
The PZFD report also points out the length of the investment process, i.e. the long wait by apartment buyers until the investment is completed. It is essentially an effect, he suggests Long wait for administrative decisions to be issued. The example cited is Białystok, where the waiting time is on average 90 days for the issuance of development conditions, and in Kraków it takes more than 365 days.
Why are housing prices rising?
Why are apartment prices so high? As PZFD experts noted, We are at a moment of historical imbalance between supply and demand in the real estate market. Available buildings, which are in short supply, sell out quickly, driving up prices.
— Price increases in the primary market are still affected by inflation The high prices of some building materials, but more importantly the lack of land allocated for construction – explains Kamil Sobolewski, Chief Economist at the Employers’ Organization in Poland.
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