Despite a drop in residential sales, the market remains in a state of equilibrium
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Developers still doing well
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Kazimierz Kirejczyk, FRICS
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Kazimierz Kirejczyk, FRICS
Wola is a district that homebuyers feel strongly about. Some love it, some hate it. It’s a fact that more flats are constructed and sold here than in Białołęka or Mokotów and the average price exceeds PLN 8,400 per m2, which is more than in Wilanów.
Over the past dozen or so years Wola has evolved from a district attracting small scale and average standard projects into the most active district in Warsaw in terms of construction, with considerably varied prices and quality.
Only a decade sufficed to transform a typical industrial area, where just under 100 new flats were completed in 2006, into one of the most popular districts of Warsaw with 3,000 new units being constructed annually. Half of them are located in the central part of Wola, which is the western part of Warsaw’s city centre.
The pioneering decision made by the office segment investors had a great impact on the development of housing in this part of the city. The most spectacular projects include the Daewoo Tower (1999), the Pekao headquarters building (1993), the PBK bank complex (1999) at the Daszyńskiego Roundabout, the Kredyt Bank office and the BGŻ bank headquarters at ul. Kasprzaka. The image of this area was also influenced by the opening of the Warsaw Rising Museum (2005) and the Hilton hotel (2006).
300 to 400 units were sold annually in the central part of Wola in 2009–2015 with the exception of the particularly weak 2012, when the number of offered flats was also low. Comparing to that period, the 2016 results were record-breaking: over 1,000 units were sold in total and a similar number of units were released onto the market.
The situation is even more interesting if we examine the residential projects in the entire district. Over 17,000 units were completed in 2007–2016 (around 1,700 units annually on average). The developer’s contribution was the greatest in the past 2–3 years. In 2016 alone they released 4,300 units onto the market and over 4,000 flats were sold. In this respect, Wola has significantly outperformed the popular districts, such as Mokotów or Białołęka. There are no signs that the developers or homebuyers would lose interest in this district in 2017.
It is noteworthy that the prices have been increasing sharply and systematically in the past three years. The average price per metre square of units offered in late 2016 was higher by 9% compared to the corresponding period of the previous year, by 12% – two years ago and by 16% – three years ago.
There are two main factors that make this area increasingly popular: more and more jobs in the modern office buildings and access to the transport network. Metro is particularly important but the well-developed and modernised tramway and bus lines also have a significant impact. Access to education and retail is also fairly good.
The absence of public parks and private green areas in the district is a drawback. It is expected that ul. Grzybowska will have a truly urban character, yet the passive approach of the city authorities to creating new parks significantly limits the attractiveness of the region for certain target groups, especially families with young children. There is a risk that a social monoculture might develop, dominated by singles and childless families.
The Dembud cooperative was the first to launch large residential projects in this area. The first project was the complex of buildings located in the area of ul. Żelazna and ul. Grzybowska (in 1995) and it was followed by the project at ul. Łucka (in 1998). Other notable residential projects in this area include: the Łucka City skyscraper by JW Construction (2004), Platinum Towers by Atlas Estates (2009), the mixed residential and office JM Tower, also known as Centrum Żelazna (2011) and Apartamenty Pańska by Acciona (2010). The decision to build the central part of the second metro line gave a major boost to the residential market. It triggered a boom, visible first on the land market and then in the number of launched and planned residential projects. One of the flagship projects that illustrates the scale of residential development in the area is 19 Dzielnica by Pro Urba.
Other opportunities that have been explored include conversion of the Warsaw brewery site. Echo Investment, the current investor, plans to transform this area into a multi-functional complex offering office and retail space, entertainment and residential space in nearly 1,000 units. What is important, both commercial as well as residential developers are taking on the role of creating city-forming public space to avoid the future consequences of a rapid and unidimensional expansion, a problem noted in Służewiec Fabryczny, which is colloquially called the Warsaw Mordor.
It is also in Wola that the first project by a foreign investment fund specialising in institutional rental was constructed. Bouwfonds IM bought an entire building offering 193 units in July 2016 from Matexi Polska, giving a clear signal that the district’s rental market has huge potential.
Nothing illustrates the potential of the residential market better than numbers: the developers planned to complete 7,400 new flat in 2018–2019, out of which over 6,100 (83%) have already been launched for sale and nearly 3/5 were sold. As at late June 2017 there were still 2,800 flats offered for sale with an average price of PLN 8,483 per metre square.