This is how much the development company earned on the sale of apartments. Margins skyrocketed

Chaos on the real estate market continues. Apartment prices in the largest Polish cities have been soaring for several months. Studio apartments or two-room apartments are available to only a few people. You can pay up to PLN 1 million for a small room. It is even more expensive in prestigious locations, where you have to pay several dozen thousand zlotys per square meter of an apartment.

Real estate market. Customers book apartments at the planning stage

Customers do not hide their surprise at the high prices. More and more people admit directly that they cannot afford to buy a flat. Others, in order to fulfill their dreams of having their own apartment, look for cheaper premises on the outskirts of cities or in smaller towns.

In Warsaw, we are dealing with a new, unusual trend, which we wrote about in Wprost.pl. Many people plan to buy an apartment not at the stage of construction or a hole in the ground, but when their plans are being developed. Customers claim that by choosing this solution, they will pay less because they have a guarantee of purchasing an apartment before developer companies raise apartment prices again.

Apartment prices change from month to month

This is best seen in analyst reports, those prepared a few weeks ago are no longer valid. Depending on the city, you have to add from several hundred to even PLN 1,000 to the previous price per square meter of the apartment. zloty. This was also the case in July, August and September. Potential customers also discuss high apartment prices on social media.

Many people believe that there is no economic justification for such increases in housing prices as they are seeing in the second half of this year. The prices of some apartments in Tricity are higher than in Warsaw. There are more such offers online. Internet users wonder what margins developer companies have. Their calculations show that they constitute from one quarter to one third of the apartment price.

In the third quarter, the developer sold over 1,000. apartments

The answer to this question can be found in reports published quarterly by the largest development companies. This week, Dom Development presented its financial results. Published data shows that from July to September this year, the investor sold 1,081 apartments, and after three quarters he has already sold over 2.9 thousand apartments. apartments sold.

“The dynamic increase in demand combined with the supply that cannot keep up with it, in turn, contributes to a further significant increase in housing prices” – we read in the company’s announcement. Investors still have a high share in apartment sales. Only almost half of the transactions (49%) were financed with mortgage loans. From July to September, the margin on apartment sales also increased. In the third quarter of last year it was 26.6%, now it is 31.2%.

High demand for apartments resulted in an increase in margins

According to experts, the reason for the increase in margins is high demand, which was additionally strengthened by the introduction of the Safe Credit 2% program. Another factor stimulating demand were expectations for the first reductions in interest rates, the company informs in its financial report.

“The price increase we are dealing with over the course of 2023 is too high for a stable market. We can say that we are happy about it, because it translates into margins,” noted Jarosław Szanajca, president of Dom Development. He added, however, that looking at the market in the long term – this growth is too high, it should be stable and quite slow, then the company’s future on the market will be easier.

As the authors of the report argue, the company recorded the highest profits in the Tricity, which dethroned Warsaw as the leader of the most important market for the company so far. The investor earned PLN 53 million gross on the Gdańsk market. The company’s net profit was 40 percent. from amounts obtained from customers. In Warsaw and Wrocław, the company’s margins were lower than in Gdańsk.