- In 2023, the company achieved significant sales success in the ready-to-live-in apartment sector.
- Buyers demonstrated an unusual surge in interest towards larger accommodation.
- In 2024, there will be a noticeable increase in customer expectations with increasing emphasis on the quality of common areas and an attractive environment for the investment.
In 2023, we conducted sales of various residential investments in Warsaw and Krakow. In the capital, we offered projects such as Solen Kabaty, Holm House, Jasminowy Mokotów, Park Skandynawia, and the first part of the multi-stage Nu! Warszawa Wola. To offer customers more choice, in the second half of the year, we also introduced a new investment, Stilla, located in Rakowiec in Warsaw, and further stages of our well-known estates: Holm House and Park Skandynawia. Meanwhile, in Krakow, the project Hemma Orawska turned out to be a success, with the majority of the apartments sold almost simultaneously with the receipt of a permit for use.
It was a year of investment activity
Throughout 2023, we saw a steady increase in traffic to sales offices, which continuously grew from the end of the first quarter, reaching its peak in the summer and remained high until the end of the year. The 2% Safe Credit scheme, offering attractive financing conditions, without a doubt, was one of the main factors affecting the real estate market in the past year, and resulted in a significant boost in investment activity. Its influence became noticeable in the first quarter when the first concerns of clients regarding the potential for price increases and a decrease in available offers after the introduction of this mortgage were observed. An undeniable benefit of this social program was that a group of buyers who previously could not afford a commercial loan, managed to purchase their first apartment with its help. On the other hand, the market currently faces a lack of supply, with the existing offer not able to satisfy all the needs.
However, in the case of Skanska, few of our clients chose to take advantage of this type of support. The vast majority of buyers paid in cash or by other forms of financing, even though in our offer there were apartments eligible for the program in almost all investments. The percentage of transactions involving customers using the 2% Safe Credit varied from a few to several percent.
Inflation also affected purchase decisions. The dynamic price increase per quarter caused many investors to make purchase decisions more quickly. Most of these people put off purchases in 2022 and saw the right time to finalize transactions in 2023. Traffic in the offices is still high, the supply does not keep up with demand, and there is no sign of a change in this situation.
Growing interest in larger apartments and constant demand in the segment up to 800 thousand zł
We see unabated interest in small apartments, i.e., one- and two-room flats. These flats are bought both by people buying a first apartment for their own purposes and by investment clients, for whom the goal is to rent. Ultimately, these flats are often destined for adult children.
The second group of best sellers are large apartments: four and five-room flats, with areas exceeding 100 sq m. Most frequently, these are apartments bought for personal use by customers looking for comfort and interior space. It’s a particular phenomenon because this group of buyers was not especially active in 2022 but returned to the market in 2023. These types of flats were very popular in projects such as Jasminowy Mokotów, Holm House, and at Solen in Kabaty.
Boom in ready-made apartments
In 2023, the company achieved considerable sales success in the sector of ready-to-live-in apartments. The offered flats were finished to a high standard, which included not only the execution of the floor, internal doors, and bathroom but also a comprehensively equipped kitchen with installed appliances and built-in wardrobes. A few years ago, this segment was niche, now things are changing. Customers’ concerns related to the lack of personalization possibilities or quality of interior finish are dispelled at the sales stage, where buyers have the chance to familiarize themselves with the materials and design in detail. Time-saving, and above all, the ability to avoid making difficult decisions related to the choice of materials or the coordination of the renovation team, become a significant convenience. Many clients decide to buy a finished flat to avoid taking an additional loan for finishing works; they choose one larger mortgage instead of two separate loans. This trend will surely continue in 2024. We therefore plan to continue to develop our offer, adjusting it appropriately to the specifics of each project. We believe that turnkey apartments represent the future of the developer market, especially considering that only in Poland are unfinished flats sold.
Bloom of energy-saving flats
In 2023, clients were looking for flats in which technologies were used that are both comfortable to use and allow for savings, especially in terms of electricity and heating. The vast majority of buyers believe that these solutions contribute to the increase in real estate value. At Skanska, we have been trying to introduce innovative technologies for several years, such as a system for remote flat management or eco-friendly solutions, e.g., greywater recovery at Holm House 5, which allow for comfortable use of the flat while also controlling electricity or water usage. They contribute to actual savings, but also to a more sustainable lifestyle. Our research confirms that our remote management system can generate savings of up to 18%.
We foresee that the trend related to interest in energy efficiency will gain importance in the coming years.
In 2024, requirements will increase: customers place greater emphasis on the quality of common areas and an attractive environment for the investment
We start to notice that with the rapid rise in real estate prices, customer expectations are also increasing. Those looking for flats are placing more and more emphasis on their standard. Customers compare offers and collect detailed information on what the price of the flat includes. They pay attention to the quality of the product we provide, and the selection criteria are changing. In the second half of the year, we conducted research among buyers and potential clients planning to buy a flat. The studies showed that the standard of common areas is fourth in the hierarchy of decisive factors, falling behind only price, location, and features of the flat. In addition, customers pay attention not only to the appearance of corridors or lifts but also to the surroundings of the investment – attractive greenery or common places to spend free time. It should be noted that for today’s buyers, the quality of a flat is evidenced not only by its interior but also by well-thought-out external solutions creating a unique environment. That is why in the Stilla project, we created a greenhouse as a common space for growing plants, seeing this as a potential for building neighborly relations. At Solen Kabaty, we designed a large recreational area with loungers and exercise equipment, and at Nu! Warszawa Wola, a park with a graduation tower was created.
Market challenges in 2024
In the face of rising construction costs, limited land availability, and a prolonged administrative process, the availability of flats is becoming an increasing problem. Already today, we see a need to streamline the process of issuing administrative decisions, which could lower the costs of producing residential units.
Due to inflation, but also due to increased labor, land costs, and lengthening investment processes, apartment prices are steadily increasing, which may be a challenge for potential buyers. Changing laws and technical requirements will also be a challenge for developers.
In my opinion, it is worth starting a conversation about the number of parking spaces in investments, especially in central locations. We already see that not all clients want to move around the city in their own car. The trend of moving cars out of the city center is strengthening, while the coefficient of parking spaces is still very high.
In 2024, we also plan to continue implementing green construction solutions. Developers are eagerly awaiting a program supporting the financing of green investments.
Aleksandra Goller, Member of the Board and Director of Marketing and Sales at Skanska Residential Development Poland
