Twelve developers listed on the Catalyst market sold 4,982 units in Q4 2020 compared to 4,719 a year before, which indicates an improvement in contracting dynamics by 3.7%. Throughout 2020, developers found buyers for 15,879 units (-7.3% y / y), which in combination with the sharp economic slump in March 2020 is a better reading than expected, Navigator Dom Maklerski reported in the report “Situation the largest housing developers from the Catalyst market after Q4 2020 “.
“Last year was an extremely difficult time for the economy as a whole. The prevailing pandemic created numerous challenges for all industries that entrepreneurs had to face. Many sectors to this day struggle with the direct and indirect repercussions of COVID-19, making many sectors of the to this day, they have not returned to the effectiveness of pre-pandemic activities. We believe that, compared to the entire market, the residential developer sector coped with the hardships of 2020 very well, “we read in the report.
A significant challenge last year was undoubtedly redefining business models that will be based on the sale of apartments using online communication and maintaining the sanitary regime. Even in March 2020, the effectiveness of offering apartments with limited direct contact with the seller could raise a lot of question marks. Today, however, we can say that the developers have passed the exam, Navigator experts added.
Both in the fourth quarter of 2020 and the entire last year, the highest contracting level was once again in a row by Dom Development, which in 2020 managed to sell 3,756 units against 3,661 in 2019 (+2, 6% y / y) and 3,602 in 2018 (+ 4.3% y / y). Atal was second on the podium, selling 2,896 units in 2020, which is 8.9% less than the year before. The developer comments that the contraction reduction is in line with the company’s forecasts. The third place in 2020 was reserved for the Robyg Group, which signed 2,567 development contracts and 2,155 net reservation contracts (-16.1% y / y). It is worth emphasizing the developer’s ambitious plans for the current year, in which the group will aim to achieve sales of 3,000 units in connection with the increase in demand for apartments expected by the management board in 2021.
The largest improvement in sales in percentage terms was demonstrated in 2020 by the Lokum Deweloper Group, which last year contracted 463 apartments compared to 268 units a year ago (+ 72.8% y / y). Navigator believes that Ronson Development (918 units, + 20.6% y / y) and Victoria Dom should also be satisfied with the sales achieved in 2020, which despite the drop in contracting dynamics compared to 2019 (-6%), another year in a row shows that it is a significant player, in particular on the Warsaw market.
“Q4 2020 was another quarter in which we saw a strong demand for residential premises, which was represented both by buyers of units for their own needs and investors. We explained the high interest in premises in Q3 2020 by postponing the decision on the purchase of premises from Q2 to Q3 last year. In our opinion, this effect was less visible in the last quarter of 2020, in which other factors turned out to be more important “- we read further.
The first one is undoubtedly the record low interest rate environment, which in principle prompts the public to consume or invest at the expense of saving on bank deposits. Investing capital in the real estate market is one of the solutions most often chosen by our society, which is associated with the perception of premises as products that are more understandable to buyers and less exposed to price fluctuations in relation to, for example, equity securities, which at the end means a feeling of relative capital protection security. Low interest rates also translate into lower costs of mortgage loans, the availability of which in Q4 2020 looked much better than in the first half of last year. The work model based on a full or partial home office partly changed the preferences of buyers for whom the current flat was too small to find a place to work in it, which also determined looking for a new flat.
DM points out that for the next quarter in a row we have not experienced the drop in housing prices expected by many market commentators, which was a factor in Q4 2020 supporting the speed of consumers making decisions about buying a flat. He believes that the biggest challenges for developers in the near future will be still inefficient offices, and thus long waiting periods for all kinds of permits, including environmental decisions, building conditions, and finally building permits, which were issued last year the quantity puts a lot to be desired. Administrative issues will, in our opinion, result in a lower number of investments in the coming years than in previous years, thus lowering the availability of flats for potential buyers.
“A difficult task for developers for the coming periods will also be building an attractive land bank, because we see that the availability of plots is dramatically decreasing from quarter to quarter, and the owners of interestingly located land have in many cases very exorbitant price expectations, often due to the question whether the With the current macroeconomics, land for cash is a good solution. Expensive land and a smaller number of investments are important arguments for us not to expect significant reductions in developers’ price lists in the near future “- it was indicated in the material.
In 2020, the companies included in the list handed over the keys of 15,335 apartments to their customers, compared to 16,507 a year earlier (-7.1% y / y). The authors of the report believe that the decline is relatively small, and the problems with signing notarial contracts from the first half of 2020 were much less noticeable in the last quarter of the year.
“Finally, it is worth emphasizing that the vast majority of developers, despite the prevailing pandemic, completed their construction projects on time. I expect that in 2021 we will see further strong demand in the housing market” – concluded.
The data relates to selected developers from the Catalyst market, i.e. Archicom, Atal, Develia, Dom Development, Inpro, JHM Development, JW Construction, Lokum Deweloper, Marvipol, Robyg, Ronson Development, Victoria Dom.
Source: ISBnews
