Report from the webinar – “Investing in the real estate market”

On June 17, 2020, an extremely interesting virtual seminar on investing in the housing market took place. This meeting was exceptional not only due to the investment fever we are currently observing on the market, including the housing market, but also due to the institutions partnering the event: JLLwww.jll.pl, RICSwww.rics.org/eu and, of course, MCZ UWwww.mcz.edu.pl.

One more partner, VECTIO,  should also be mentioned, thanks to which the Association has gained a modern tool for registering participants for events – www.vectio.pl. Thank you very much Stefan Karmaza, Graduate of the XXV thread of the program for your help.

The meeting was started by Sylwester Wybranowski, President of the Association’s Board, who, on behalf of the Association’s Board, welcomed all participants, guests and partners of the meeting. Next, Tomasz Ludwicki – lecturer of Strategic Management subject and Director of the MBA @ UW Program, took the floor and presented the latest information, including the most important information about the current final defense sessions at EMBA @ UW. In 2020, in times of corona-virus pandemic, of course, the defense of consulting projects will take place online.

Before the discussion on changes in the housing market began, we listened to Joanna Plaisant – Country Manager for Poland at RICS Poland, an organization with over 150 years of history, bringing together professionals and guaranteeing standards of activity in the real estate market. RICS members include, among others, Maximilian Mendel, JLL and Sywlester Wybranowski, and quite a large group of people who took part in the webinar. Ms Joanna confirmed that for RICS members, participation in this event counts as 1.5 hours of CPD (continuing professional development).

Finally it was time for the presentation and discussion. Ms Katarzyna Kuniewicz, head of the Housing Market Research Team at JLL (formerly REAS), was the first to enter the scene. Ms Katarzyna presented several dozen slides with interesting comments and explanations. The participants of the webinar learned, among other things, about the situation on the primary housing market in the six largest Polish cities, i.e. in Warsaw, Kraków, Wrocław, Tricity, Poznań and Łódź. We heard about the moods and main concerns of developers after almost 3 months of functioning in the reality imposed by the pandemic. The expert also talked about possible scenarios for the behavior of housing prices in the coming months. The part of the presentation comparing the current market data with analogous indicators from the period of the last crisis on the housing market in 2009-2010 turned out to be very interesting.

Maximilian Mendel, head of the JLL Housing Investments Team, introduced us to an area of ​​the market that until recently seemed extremely distant and was beyond the scope of interest of many individual investors. He spoke about  the market of apartments for rent – PRS (Private Rented Sector), which in Poland is referred to as the institutional rental market. The segment, which in Western Europe is the domain of people who manage huge housing portfolios, specialized organizations with appropriate capital and experience, has been developing very intensively for several years in Poland. According to the expert, it will develop even faster in the coming years. Housing formats such as Student Housing, Assisted Living, Coliving or Microliving will gain significance.

Joanna Erbel shared with the participants of the webinar her experience resulting from, among others, working on the Warsaw Housing Policy – Mieszkanie 2030, http://2030.um.warszawa.pl/co-wypracowalismy/ and her vision of the development of the housing market. There were also references to the book that Joanna Erbel published in 2019, “Beyond Ownership. Towards a successful housing policy ”. Housing in Poland should be available not only in terms of architecture, lack of barriers, but also in terms of finance. Joanna gave examples of housing projects that meet such expectations, with her favorite project from Vienna Holzwohnbau, Seestadt Aspern, Austria. Joanna’s statement also included the topic of ecology, which is why a link to Business Alert 5, the Alert-biznesowy-5_

In the second part, the speakers answered questions from the guests. See some of them below:

Question from Grzegorz: Over the past few years, the 6 largest cities have sold 65,000 apartments. Assuming an average number of 2.5 people per flat (data from the Central Statistical Office), this gives 162,000 people moving to a new flat every year, or 3% of all inhabitants of these agglomerations. A similar calculation for Warsaw gives the same result (about 3%). This means that with the current pace of new housing production, about 30 years from now, we will all live in new apartments (max 30 years, and the average age of the apartment 15 years), and all apartments that surround us will be empty. Is this housing production rate sustainable?

I know arguments for a further increase in volume / prices (low urbanization, flow from villages to cities, from small towns to large cities, immigration), on the other hand, Poland’s demography in the long term looks very poor.

In response, we heard, among other things, that the sales rate in recent years was very dynamic, but maintaining such sales volumes over the next 30 years would rather not be possible, also due to the factors of change, the effects of which we cannot precisely define today.

Question from Bogdan: The currently visible slowdown in apartment sales on the market (April – May) was caused by fear and technical problems. The real crisis (slowdown in world economies and ours) is yet to come. This has little to do with the “wobble” we saw in 2008 (both the foundations and the course are today). Does JLL (Ms Katarzyna) mean through the presented historical data from 2008-2009 that what is ahead of us will look similar? What are JLL’s predictions about the housing market in the context of the coming slowdown (crisis) and “new normality”? Will, for example, rents (corporate investors, flat +, REITs) take over and there will be less buying for living?

In response, we heard, among other things, that after months of “closing” sales offices, apartment buyers have returned to their purchases, in addition, there are new incentives to “take money from deposits”, although, as Katarzyna Kuniewicz noted, “the amount of savings may be a very serious demand stimulator on the housing market, but not necessarily on the primary market ”. During the presentation, this question was also addressed by Maximilian Mendel, showing the saturation of the “academic” market – in Warsaw only 8-10% of students can count on a place in the dormitory, according to JLL estimates, another 20-25% of students live with their parents , or with the family. The remaining group of students has to look for accommodation on the rental market, and as shown by the preference research – they would be happy to live in a good-quality dormitory.

Question from Bartosz: A question about the discussed topic and also in the context of the book by P. Joanna Erbel. so far, there has been a discution about densification of cities and the fact that we will migrate to cities. Are these forecasts still correct in the post-lockdown situation? Do the tendencies of working in home office and a greater willingness to live in a larger area with gardens, do not conflict with the crowding of cities?

In response, we did not comply with the unequivocal declaration, because almost everyone agreed that the development of the remote work vs. Working in the office on a pre-Covid-19 pandemic basis will continue for the next few years. The global trend of Mega Cities was also mentioned, which in the next century will change the image of many regions of the world. Although the Mega City in Poland “is not in danger”, there are many solutions emerging in such places, it will also be visible in Poland (e.g. managing city transport, energy or water resources)

Question from Łukasz: To sum up, is this a good time to buy a flat that is to be delivered by a developer in a year or two? Is it better to wait for new projects that should be cheaper?

This question was answered by Sywlester Wybranowski, who referred to his almost 20 years of experience in the field of apartment sales – “Whether it is a good time to buy a flat depends on the need we have. If someone today absolutely wants to take money from a bank deposit and transfer it to another place, it is a very good and clear need. “

Other discussion points:

From Hanna: We have a problem with housing management, in general, on a small and large scale. Leasing management is only a small part of the problem.

From Kajetan: Commentary: as an amateur rentier in the housing market in Poland and Germany, I have much more fun with solid and smart investments in Germany (more eco-friendly etc), and more return on investment in Poland. Thank you, very interesting meeting.

From Hanna: in 2018, there were over 45,000 new taxpayers accounting for the lease.

COMPETITION: The award was a book by Joanna Erbel – “Beyond Ownership. Towards a successful housing policy ”and Agata was the quickest to answer the question when the Lehman Brother Bank collapsed. Congratulations.

There were many topics to discuss, but after 2.5 hours we ended the meeting.

Sylwester Wybranowski, invited everyone to the next events prepared by the Association, thanked everyone for their participation and ended the meeting.

Thank you for participating speakers:


Speakers:

Katarzyna Kuniewicz

Katarzyna Kuniewicz leads the Housing Market Research and Analysis Team, which at JLL is responsible for the implementation of ongoing monitoring of the development market and the preparation of reports on this sector in selected Polish cities.

She is a graduate of the Institute of Economics of the Catholic University of Lublin. She also started her professional career there. Then she worked, among others at the Ministry of Finance, in the team responsible for the preparation of the amendment to the Public Finance Act. She gained experience in the field of cooperation with the public sector as a consultant in numerous programs supporting municipalities in the years 2000-2005. Participated, among others in the “Creditworthiness Enhancement Program” organized by the European Bank for Reconstruction and Development (editions for Wrocław, Kraków and Gdańsk) and in the Institutional Development Program, implemented under an agreement with the Ministry of Internal Affairs and Administration

In 2007-2018 she was associated with the REAS consulting company, which on December 1, 2018 became part of JLL. She is the author and co-author of numerous studies and reports for development companies.

Member of the Polish Association of Real Estate Advisors (PSDRN).

Dr Maximilian Mendel, MRICS

Maximilian Mendel leads the JLL Housing Investments Team, focusing on transaction advisory in the sector of institutional rental of apartments and private dormitories.

He is a graduate of Interdisciplinary Studies in Spatial Planning at the University of Dortmund. He obtained his doctorate at the Institute of Geography and Spatial Planning of the Polish Academy of Sciences, defending a dissertation on the role of housing developers in the transformation of urban space in post-socialist Warsaw. Speaker at many international real estate conferences and author of many publications and studies in the field of real estate and spatial planning. He started his professional career at Bank Przemysłowo-Handlowy in Warsaw.

In 2006-2018 he was associated with the REAS consulting company, which on December 1, 2018 became part of JLL. At that time, he was the leader of many research and consulting projects, not only in Poland, but also in the residential markets throughout the region, including the Czech Republic, Romania and Bulgaria, as well as in Slovakia and Ukraine.

He is a member of the Royal Institute of Certified Valuers (RICS), Urban Land Institute (ULI) and the Polish Association of Real Estate Advisors (PSDRN)

Joanna Erbel

Joanna Erbel – sociologist, city activist, housing expert. Founder of the Close Foundation dealing with supporting local activities and creating knowledge about housing innovations. She coordinated work on the preparation of the housing policy and the Mieszkanie2030 program for the Capital City of Warsaw. Member of the expert group of the Rental Market Laboratory. The author of the book “Out of Property. Towards a successful housing policy ”.

Fee: The participation is free Or Any contribution to the account of the Association.

On this occasion, we remind you that we are an organization that maintains activity through annual contributions and other voluntary contributions from members of the Association or external donors. Therefore, we encourage you to make payments to the Association’s account: 07 2030 0045 1110 00000333 1250. Thank you for your feedback regarding voluntary payments. We will honor donors at the graduation ball.

On behalf of the Association Board

Sylwester Wybranowski (604 272 433)  & Krzysztof Pajączek (723 998 528)

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