2nd edition of the “Luxury apartments market in Warsaw” report
Is the luxury apartments market already sated? Or are the apartments poorly managed and the clients do not want to live in them?
In the 2nd edition of the “Luxury apartments market in Warsaw” report, Made Concept Sp. z o.o. Sp. K. compared transaction data for the years 2014 and 2015. The analysis concerns transactions over 16 thousand PLN per sq. m.
We find out that the year 2015 brought a decrease in the sale of expensive apartments. This trend is most noticeable in the Śródmieście district, where the sale on the primary market fell from 100 apartments in 2014, to less than 60 transactions in 2015. On the other hand, sales volumes have slightly increased in other districts of Warsaw. When comparing the years 2013, 2014 and 2015, the year 2015 belonged to the secondary market.
Does that mean that the market of luxury apartments is now saturated?
Not necessarily. Our observations confirm that there is a demand for luxury apartments in premium locations.
Unfortunately, clients complain that buildings with luxury apartments are managed in a manner unsatisfactory for their residents. The process of selling flats lasts even more than 5 years In large buildings. Developers arrange sales offices in unsold apartments (even though it is illegal),and/or lease them for events or business meetings. The residents have the impression of staying in a hotel instead of living in a luxurious residential building. Badly managed real properties have noted a considerable decrease in sales. Offices and a large number of lessees in the building also considerably decrease the sales level and have an adverse impact on the price of apartments. For this reason, buyers are more willing to buy large apartments in tenement houses or small buildings up to 50 apartments. Small flats in large blocks of flats or high-rise buildings are bought for investment purposes.
The clients prefer buying apartments delivered on a turn-key basis, but they want to have an influence on the character and the kind of fit-out and decoration. Therefore, the era of luxury apartments fitted out by the developer in the so-called “universal” style has ended. The time of “tailor-made” apartments has come.