Half-year review: Current real estate trends
Sebastian Janicki
by Sebastian Janicki
Sebastian Janicki specialises in the practicalities of real estate and construction law. His particular skill set is the ability to guide investors through the intricacies of the entire construction process.Contact Sebastian.
Following intense discussion with players in the market, Penteris Partner Sebastian Janicki has sketched out five clear trends that will impact the real estate market in the short and long term.
1. Coming to terms with inflation
According to a recent Pekao Bank report, Poland can expect the persistence of elevated core inflation for the next two years. Market players have generally anticipated this and inflation is now ‘built-in’ and an accepted part of the whole economic package.
2. Bouncing back bit by bit
It may take around two years for the market to fully return to normal but a small yet tangible rebound of 2 percent could provide the optimism the market needs. Although lending rates remain a little bit lower than in the past, contractor prices still remain high, and there are additional factors that could limit investment opportunities. This might lead to potential consolidation in the developer market. Additionally, joint ventures are being considered as a means to reduce the cost of bank financing.
3. Sustainability in focus
There is growing interest in decarbonisation within the construction industry, addressing important aspects such as the impact on investment costs, including demolition and construction. Consideration is given to utilising materials and technologies with low carbon footprints. It is worth noting that Poland has yet to draft the necessary legislation for implementing these measures, so there is great potential in this area. Furthermore, there is an emerging shift of focus from recycling to the reuse of materials and equipment, highlighting the importance of sustainable practices.
4. AI to speed up development
Artificial intelligence (AI) has an increasingly important role in supporting investment preparation and marketing efforts. One prominent example is a tool that enables efficient research on the absorption capacity of an investment site. In mere minutes, this application can provide insights on development options based on the site’s planning requirements and current regulations, including housing layouts, surroundings, communication, and green spaces. While some developers express scepticism about interpreting regulations, this tool is expected to be a game changer for architects with the knock-on effects being obvious.
5. Developers to consolidate
The final trend currently observed in the real estate market is less of an economic or technical trend but rather a business trend that could have great impact on the entire market. With bank financing becoming increasingly difficult for smaller developers due to the above factors, businesses more often are considering merging with the competition in order to give themselves the necessary resources to compete in a more challenging market. There could be huge ramifications for the Polish real estate market and beyond when this particular trend begins to take effect.
Penteris is a European law firm committed to helping investors keep ahead of the market by “getting things done” and “building long-term relations”.
GGI member firmPenterisWarsaw, PolandT: +48 22 257 83 00
Law Firm Services
