Developers still doing well
25 April 2019
Kazimierz Kirejczyk, FRICS
Łódź: the shining star of the development market in 2018
6 February 2019
The housing market in 2018: a thriller with a happy ending
22 January 2019
Summary of 2018 on the primary residential market
31 December 2018
Kazimierz Kirejczyk, FRICS
Long-term rental only for a year?
21 November 2018
Maximilian Mendel, Ph.D., MRICS
What kind of flats are potential buyers looking for? The answer appears to be obvious, according to the current sales results in the development industry. All of the demand groups are active on the market, and sales are being made of the cheapest, and of the most expensive flats. Both small flats and large flats are being snapped up; some people wish to live on the higher floors, and some prefer the ground floor. The question is whether customers actually have their expectations met when they make a purchase, or whether they are more likely to make a negative choice and settle for whatever happens to be on the market.
It has become necessary to match a product to suit buyers' needs as far as possible due to the changes that we are seeing on the residential market. Difficult access to attractive investment plots, increasing costs of realisation, and proposals for legislative changes limiting the potential for development will inevitably render property developers' schemes less profitable. Despite continuing low interest rates, limited supply is causing prices to go up, and this will eventually affect demand. One of the most serious problems that developers will face will be finding a way to attract customers with more capacious wallets, who are usually more demanding, and maintaining good sales results. This will require greater effort to create a product that matches a buyer's expectations as much as possible and enables the right sales message to be conveyed to that buyer. For this to be possible, knowledge of consumer preferences is needed.
Research into buyer preference conducted based on data obtained through the OBIDO platform in 2017 in Warsaw, Cracow and Wrocław – the three largest and most active residential markets in Poland – made it possible to examine this issue more closely.
It will come as no surprise that the most sought-after flat on these markets was a 1-bedroom flat of a minimum area of 40 m². Contrary to common belief, however, a 2-bedroom flat of a minimum of 56 m², and not a studio flat, is the second most popular.
An analysis of the expectations of potential buyers with regard to the surface area of various kinds of flats is also interesting. With respect to the most popular, which are studio flats and 1 – and 2-bedroom units, buyers have similar requirements in all three cities. On average, the minimum space required in these cities is 28 m² for studio flats, 39 m² for 1-bedroom flats, and 56 m² for two-bedroom flats. The differences between preferences of buyers on particular markets are only revealed in the case of the larger units. The surface area expected by residents of Warsaw seeking 3-bedroom flats starts at 77 m² and is 4-5 m² more than the area required by buyers in Cracow and Wrocław. The large surface area of 4-bedroom flats is something valued in Warsaw (minimum 93 m²) and Wrocław (minimum 89 m²), while for residents of Cracow it is important to make maximum use of the space when purchasing a unit of five rooms. For them, 77 m². is sufficient.
Requirements with regard to residential space also vary depending on who is making the purchase. The smallest flats are sought by investors looking for a product to purchase to let. They are satisfied with a unit of a minimum of 35 m². Single persons looking for their own place will be happy – depending on the city – with a flat of an area of between 36 and 39 m², while couples are satisfied with a flat 10 m² larger on average. Obviously, the largest flats are sought by families, although there are major differences in this group of buyers between the individual cities. In Warsaw and Wrocław, families need on average 3-4 m² more to meet their residential needs than in Cracow.
More details on homebuyers' preferences you can find in one of our reports e.g. Residental Market in Krakow. Preferences od buyers