Most residential development companies listed on the Warsaw Stock Exchange have already published their financial results for 2025. An analysis of their reports shows that the average net margin of the largest companies in the sector reached 17.1%. This is a level close to the average recorded over the past decade and in line with the expectations of banks financing residential projects.
Financial data published by the largest development companies listed on the WSE show that the profitability of the residential development sector remains stable. The average net margin for 2025 amounted to 17.1%, compared with 16.1% a year earlier. The average for the past 10 years stands at around 16.2%.
The Polish Association of Developers points out that net margin is the appropriate indicator for assessing the actual profitability of companies. This is because it takes into account not only the result on sales, but also financing costs, taxes, sales costs, administrative expenses, operating costs and the risks associated with a multi-year investment process.
“In public debate, high gross margin figures often appear and are sometimes mistakenly equated with a developer’s final profit. However, gross margin and net margin are two different indicators. Gross margin shows the result on sales, but does not take into account the full costs of running a business. Only net margin shows the real profitability of a company. The data for 2025 confirm that the average profitability of the largest residential developers remains at a level of several dozen percent, close to the average for the past decade,” said Patryk Kozierkiewicz, legal counsel at the Polish Association of Developers.
The level of net margin recorded in 2025 is also consistent with the practice of institutions financing residential projects. Banks assess investments not only through the lens of potential profit, but also in terms of execution risk, the level of equity contribution, location, sales schedule, pre-sales and the project’s resilience to rising costs.
“From the perspective of banks financing residential developments, the minimum expected margin on a project is currently most often around 15%. The preferred level is around 18%. Exceptionally, with a very high equity contribution from the investor, an attractive project location and a high level of pre-sales, a bank may accept profitability of around 10%, but such cases are rare and usually concern the largest and most experienced entities. It is worth emphasising, however, that thanks to the long-term stabilisation of the market environment, banks are increasingly willing to finance land purchases, which until recently was practically unavailable to investors,” said Iwona Załuska, Partner at Upper Finance Group.
Property development is a capital-intensive and long-term process. From the purchase of land, through design, administrative procedures, financing, construction, sale of units and final settlement of the investment, the process often takes from several to more than a dozen quarters. During this period, companies bear risks related to changes in construction costs, material prices, availability of financing, sales pace, regulatory changes and lengthy administrative procedures.
“Net profitability of around 16–17% should be assessed in the context of the entire investment cycle, not as a simple share of profit in the price of an apartment. This is a level that allows companies to maintain their ability to carry out further projects, obtain financing and ensure a stable supply of new housing,” explained Bartosz Guss, Director General of the Polish Association of Developers.
