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Recent quarters have brought dynamic changes in European economies. COVID-19 pandemic and restrictions imposed in its consequence, as well as activities aimed at counteracting their negative effects, have had a significant impact on the housing markets of European cities, changing not only the level of prices, but also rents. Therefore, we decided to review prices and rent levels in capitals of EU countries.

The analysis covers prices and rent rates of apartments of the floor area ranging from ​​45 to 55 square meters, of an average standard, located outside strict city centres. The rent rates are considered net rents, excluding administrative fees. It should be noted that due to the vide scope of the topic and, at the same time, limited volume of this elaboration, this analysis does not take into account all the differences and conditions on individual markets, including the issues related to administrative regulations of rents or differences in the standard of buildings, providing only a simple statement of values ​​for particular locations. Two capitals, Valetta (the capital of Malta) and Nicosia (the capital of Cyprus), were not included in the list, due to lack of available data.

The analysis is based on data from both websites of official statistics (Eurostat, ec.europa.eu) and websites devoted to the quality of life (numbeo.com) and real estate residential market in individual countries.

Among the EU countries capitals, Paris is the unquestionable leader in terms of the level of housing prices. The average price of 1 square meter of an exemplary apartment in French capital equals to PLN 43 426. Slightly lower, although still very high prices are paid in Luxembourg – PLN 37 460 and Stockholm, where the transaction prices equalled to PLN 26 190. Meanwhile, the lowest prices were recorded in Riga, Bucharest and Sofia – respectively PLN 5 790, PLN 5 200 and PLN 5 015 per square meter. Thus, a nearly nine times difference in the price of 1 sqm of a flat was recorded between the most expensive and the cheapest capital city in the European Union.

The level of housing prices also shows a clear division of the continent. Apart from Paris, which due to the specific location advantages and the disproportionately high demand for real estate from foreigners, somewhat evades the rules, the highest housing prices were recorded in the capitals of northern European countries – Scandinavian countries, Germany, the Netherlands and Ireland. Slightly lower prices are observed in the southern EU countries and in the region of Central Europe, while the cheapest apartments can be purchased in the capitals of South-East Europe and in the Baltic states. Out of 25 surveyed capitals, Warsaw occupies 17th place in this ranking. The average price per square meter of the model apartment in Polish capital was PLN 11 600. Thus, Warsaw turned out to be more expensive than Budapest, Zagreb and Athens, where average prices were recorded at the level of respectively PLN 9 140, ​​PLN 8 870 and PLN 7 730. Among the capitals of the Central and Eastern Europe region, prices clearly higher than in Warsaw are noted in Prague and Bratislava. The average price of the square meter of a flat in the Czech capital was PLN 17 096 (more than in Rome or Brussels), and in the capital of Slovakia – PLN 12 362.

CHART 1. AVERAGE PRICES OF 1 SQM OF A MODEL FLAT IN CAPITALS OF 25 EU COUNTRIES (EQUIVALENT IN PLN)

source: AMRON Centre own study

For understandable reasons, the most expensive capital of the European Union – Paris – occupies the last place in comparison of price availability of flats, expressed as the proportion of the price of a square meter of a flat and the average net income recorded in particular cities. For an average monthly salary, a Parisian can buy only 0.30 square meters of a flat. Interestingly, only a slightly larger area can be afforded by a resident of Prague, occupying the penultimate place in the ranking (0.34 sqm) or Lisbon – 0.38 sqm. It seems that in case of both these cities, as in case of Paris, the reasons for this phenomenon should be found primarily in their attractiveness.

Inhabitants of the capital of Ireland are in the best situation in this respect. Monthly salary allows them to buy 0.75 sqm of an apartment. Sofia in on the second place in this ranking with 0.7 sqm. However, while in case of Dublin such a result is dictated primarily by the average wage (over EUR 2 500), in case of Sofia it is rather relatively affordable level of housing prices. Warsaw, with 0.46 sqm, is on 18. position, with accessibility comparable to Luxembourg and Athens (in both cases also 0.46 sqm) and slightly higher than in Ljubljana, Rome and Budapest (0.44, 0.44 and 0.42 sqm, respectively).

CHART 2. HOUSING ACCESSIBILITY IN CAPITALS OF 25 EU COUNTRIES

source: AMRON Centre own study

The situation is slightly different in terms of rent rates of flats. The highest rent rate for a model flat among the analysed European capitals was again recorded in the capital of Ireland. The average monthly fees amounted there to PLN 6 440. The residents of Amsterdam and Luxembourg pay slightly lower, although still high rent rates (PLN 5 736 and PLN 5 639, respectively). The lowest average rent rates level was recorded in Riga (PLN 1 396), Bucharest (PLN 1 287) and Sofia (PLN 1 255). Warsaw with an average rent of PLN 2 436 was placed on the list between Lisbon, where the average rent rate for the analysed flat equalled to PLN 2 937 and Prague (PLN 2 385). The average rent rate recorded in Warsaw was the highest among all capitals of the former Eastern Bloc countries (obviously except for Berlin, where the average rent rate equalled to PLN 3 061).

CHART 3. AVERAGE RENT RATES OF A MODEL APARTMENT IN CAPITALS OF 25 EU COUNTRIES (EQUIVALENT IN PLN)

source: AMRON Centre own study

The comparison of rental availability (understood for the purposes of this analysis as the proportion of average rent and average net income) shows that residents of Berlin spend proportionally the least on renting a model apartment, compared to other analysed cities. The average rent rate for the surveyed type of apartment in German capital is only 24.1% of local average net income. The inhabitants of Brussels (28.1%) and Vienna (29.4%) are also in a good situation. However, the citizens of Lisbon are at the opposite side. The rent rate for a model apartment In Portuguese capital accounts for as much as 55.6% of the average net income. Rental availability of flats is slightly higher in Dublin (49.7% of the average net income) and Rome (47%). Unfortunately, the capital of Poland is ranked high, on 5. position, being only slightly overtaken by Athens (46.1%). The average tenant of a model flat in Warsaw spends 46% of his monthly income on rent. This is again the highest result recorded in the region.

CHART 4. RENT AVAILABILITY IN CAPITALS OF 25 EU COUNTRIES (MODEL FLAT)

source: AMRON Centre own study

Interesting conclusions can also be drawn from the analysis of simple rates of return on investment in a model flat for rent in individual European capitals (in an annual period). Once again, Dublin is the leader of the ranking with the simple rate of return exceeding 8.8%. This is mainly due to the high level of rent rates recorded in the capital of Ireland. By contrast, the lowest rate of return was recorded in Paris (only 2.2%), which in turn results from high housing prices. The rates of return for the other researched locations ranged from 6% for Sofia to 3.3% for the Czech capital. Warsaw, where the rate of return, despite the decline in rents caused by the COVID-19 pandemic, equalled to 5%, took 11. place in the ranking and was overtaken by, among others, Madrid, Athens and Copenhagen, where the rate of return was recorded at the same level of 5.2%. Similar values of return rates to that recorded in Warsaw were also recorded in Tallinn (5%) and Rome (4.9%).

CHART 5. RATE OF RETURN ON INVESTMENT IN MODEL APARTMENT FOR RENT IN ANNUAL PERIOD IN CAPITALS OF 25 EU COUNTRIES

source: AMRON Centre own study

Jerzy Ptaszyński
Research and Market Service Director

Public consultations on the draft Act on investments in the field of drought prevention dated August 12, 2020 are completed. The comprehensive draft act prepared by Ministry of Maritime Economy and Inland Navigation resulted from work of the inter-ministerial team dealing with drought in Poland and was consulted in all voivodeships under the ‘Stop Drought Program’. According to the justification, the amendments are intended to ‘(…) introduce solutions to the legal system that will simplify and accelerate work related to preparation for implementation of retention projects aimed at reducing consequences of drought in Poland’. The draft is another so-called special act, in this case the special drought act, including a package of solutions, which according to the legislator: ‘(…) will facilitate water retention and improve the availability of water resources in Poland in order to mitigate the negative effects of prolonged periods of drought’.

The draft provides for an amendment to, inter alia, the Water Law of July 20, 2017, regulating the currently applicable rules for calculating the so-called ‘rain tax’.

In Poland, the ‘rain tax’, also known as the ‘concrete tax’, has been applicable since January 2018 as a fee for reduction of natural field retention as a consequence of works or construction objects permanently connected with land on real estate with an area of more than 3500 sqm, which reduce this retention by excluding more than 70 percent of the real estate area from the biologically-active surface in areas deprived of sink or sewage systems. In accordance with the current legal order, real estate must fulfil three conditions to be subject to the ‘rain tax’:

• the surface area of the real estate must exceed 3500 sqm,
• real estate must be developed in such a way that more than 70 percent of its surface is excluded from biologically-active area,
• real estate must be located in areas deprived of sewage systems.

Currently, the tax is not widely known, especially among the owners of plots of land developed with single-family housing, due to the area and development ratio. Parameters defined in this way mean that mainly owners of commercial buildings, industrial buildings and storage facilities are obliged to submit the fee.

Draft amendment provides for tightening of these requirements. When changes come into forces, the obligation to pay the fee will apply also to owners of real estate with an area of more than 600 sqm, which are built-up in more than 50 percent. The third criterion will no longer be applicable. As a result, according to the estimations of the project’s authors, the number of plots subject to the ‘rain tax’ will increase approximately 20 times. An increase in the tax amounts is also expected. So far, in accordance with the Water Law Act tax rates have been calculated as follows:

• in case of plots without water retention devices from sealed surfaces permanently connected to the ground – PLN 1.00 per year for 1 sqm,
• in case of plots with devices for water retention from sealed surfaces with a capacity of up to 10 percent of the annual runoff from sealed surfaces permanently connected to the ground – PLN 0.60 per year for 1 sqm,
• in case of plots with devices for water retention from sealed surfaces with a capacity of 10 to 30 percent of the annual runoff from sealed surfaces permanently connected to the ground – PLN 0.30 per year for 1 sqm,
• in case of plots with devices for water retention from sealed surfaces with a capacity of over 30 percent of the annual runoff from sealed surfaces permanently connected to the ground – PLN 0.10 per year for 1 sqm.

After the amendments come into force, the upper tax rates will be:

• PLN 1.50 per year for 1 sqm, in case of plots without water retention devices from sealed surfaces permanently connected to the ground,
• PLN 0.90 per year for 1 sqm, in case of plots with devices for water retention from sealed surfaces with a capacity of up to 10 percent of the annual runoff from sealed surfaces permanently connected to the ground,
• PLN 0.45 per year for 1 sqm, in case of plots with devices for water retention from sealed surfaces with a capacity of 10 to 30 percent of the annual runoff from sealed surfaces permanently connected to the ground.

The charge depends on the area of the developed land excluded from biologically active surface and use of retention compensation, i.e. the more retention infrastructure on the property or the higher efficiency of this infrastructure, the lower the fee will be. The aim of the tax growth is to encourage property owners to increase the amount of water retained on properties, as well as to maintain the highest possible share of biologically active area, which in a broader context is to contribute to reorientation of Polish cities development from concrete to urban greenery. According to the legislator’s intention : ‘(…) The measures to increase the retention will also improve safety level by more effective flood prevention arising from intensive rainfall, which, apart from droughts, are a consequence of climate changes’.

In accordance with current legislation, fee for reduction of natural field retention is not charged for public roads and railways, if rainwater or snowmelt are drained into waters or into the ground by water devices enabling retention or infiltration of these waters. Churches and other religious associations are also exempted from this fee. When new regulations come into force, also agricultural land will be excluded from the ‘rain tax’ payment obligation.

The act will introduce a change in distribution of the collected funds: 75% of the tax revenue will be allocated to State Water Holding Polish Waters and 25% to the budget of the relevant commune, with a minimum of 80% of this income earmarked to the development of rainwater retention in the catchment area of the commune. The legislator proposes an increase in revenues for communes, as the rainwater management is the communes own task. Growth in the amount of revenues from current 10% to 25% is to increase retention as a result of the activities of municipalities that will receive an additional source of financing.

According to data from the Institute of Meteorology and Water Management, Poland is one of the least water-rich countries in Europe. The average annual surface water runoff per capita is 1600 cubic meters, which is almost three times lower than the European average. Recently, periods of water deficit alternate with periods of elevated levels of water in rivers caused by heavy rainfall, therefore taking measures aimed at reducing negative effects caused by extreme weather events by enhancing the retention is assessed positively. However, it is unfortunate that instead of introducing tax reliefs for property owners depending on the unsealed area, ponds or the number of plantings, the legislator introduces another fee. Nevertheless, Poland is not a precursor in this area – similar charges are already present in other countries, such as the United States or Germany.

The final date of entry into force of amendments to the Act on investments in the field of drought prevention is still uncertain, but according to the legislator announcements January 1, 2022 is expected to be that date.

Judyta Konopka
Project management specialist

The COVID-19 pandemic has left its mark on the construction industry. The global situation has affected the speed of land purchase decisions and increased interest in building homes. The popularity of single-family houses is constantly growing, and this trend is strongly reinforced by fears of further pandemic waves and the imposition of remote working as a standard operating model. More and more people appreciate the opportunity to own their own home with a garden or recreational plot.

Factors influencing the prices of building plots are primarily:

• location,
• shape and size,
• availability of access road,
• access to utilities,
• plot environment and development conditions,
• soil quality.

CHART 1. AVERAGE OFFER PRICES OF BUILDING PLOTS BY PROVINCES

source: own elaboration based on data from otodom.pl

The first half of 2021 revealed a significant increase in the offer prices of building plots in almost all provinces. The largest increases could be observed in Lower Silesian Voivodeship, where prices increased by 28% compared to 2020, and in Podlaskie Voivodeship, where prices increased by almost 32%. There was also a significant upward trend in the Warmian-Masurian Voivodeship (↑26%), as well as in the Greater Poland Voivodeship (↑27%). The only voivodeship, where a decrease was observed, was the Subcarpathian Voivodeship (↓12%), while in the Lodz Voivodeship prices remained stable.

In June 2021 the highest offer prices were in Masovian Voivodeship. The average price per sqm of land amounted to PLN 232. The second position was taken by Pomerania, where the average offer price for a building plot was PLN 190 per sqm. The last place was occupied by Malopolska Voivodeship with the average price of PLN 171 per sqm. Land for building development reached the lowest prices in the following voivodeships: Subcarpathian (PLN 74 per sqm), Lubusz (PLN 85 per sqm), Warmian-Masurian (PLN 91 per sqm), Opole (PLN 92 per sqm) and Kuyavian-Pomeranian (PLN 93 per sqm).

Data from the Central Statistical Office (GUS) shows that in the first half of 2021, the construction of more than 54 thousand single-family homes began. This was a 22% higher result compared to the same period in 2020. From January to June 2021, more than 60 thousand building permits for single-family homes were issued to individual investors, which is almost 29% more than in the first half of 2020. Last year, 101 600 permits were issued, which was 5 percent more compared to 2019.

CHART 2. RATE OF INTEREST IN THE PURCHASE OF APARTMENTS AND SINGLE-FAMILY HOUSES

source: own elaboration based on data from nieruchomosci-online.pl

Analysing the results of interest in purchasing particular types of property, it can be seen that the popularity of dwellings is declining in favour of an increase in interest in single-family houses.

Currently we observe a significant decrease in the number of advertisements. In all the voivodeships the number of land offers is falling. The largest decrease was noted in Podlaskie Voivodeship (↓24%), Pomeranian Voivodeship (↓23%), West Pomeranian Voivodeship and Silesian Voivodeship (↓21%). The exception is the Subcarpathian Voivodeship, where the number of announcements at the end of the second quarter increased by 4 percent. Decreasing supply of advertisements has a significant impact on the increase of prices of undeveloped land. The highest increase was noted in Kosakowo (Pomeranian Voivodeship), where the offer prices of plots increased by 20 percent compared to the first quarter and by 35 percent over the last six months.

Over the past year, a constant increase in land prices can be observed. The growing demand for undeveloped land properties is undoubtedly impacted by low interest rates. Another factor which influences the popularity of plots is the rising inflation rate. Poles are willing to invest their savings in real estate. Additionally, the increase in prices of undeveloped land is constantly driven by the rising prices of apartments and houses. According to real estate analysts, people who are planning to buy a plot of land should hurry up with their decision, because probably in 5 years the prices may strongly increase.

Dominika Gocalińska
Customer Relations Specialist

On May 20, 2021, the Parliament passed an act on the protection of rights of buyers of residential premises or single-family homes and on a Developer Guarantee Fund prepared by the President of the Office of Competition and Consumer Protection. This is an amendment to so-called Development Act which came into force on April 29, 2012.

New regulations introduce a number of changes aimed, among others, at improving the security of legal transactions of real estate and eliminating the risk of loss of payments to escrow accounts by purchasers of new apartments. In addition, the Act defines new rules, as well as procedure and content of concluding a developer agreement and other agreements concluded between the buyer and the developer aimed at transferring the property ownership right, as well as rights and obligations of the parties to the above-mentioned documents. The key change is the establishment of a Developer Guarantee Fund, the purpose of which is to increase the protection of people buying apartments from the primary market in case of bankruptcy of a developer company.

The Act imposes an obligation on the developer to provide the property buyer with the construction documentation, schedule of works, information prospectus and documentation of the developers’ legal and financial situation before concluding the agreement.

The amendment introduces a maximum reservation fee of 1% of the value of the property specified in the prospectus for the preliminary contract for premises (reservation agreement). Currently, each developer decide on the amount of the aforementioned fee. The amount paid by the customer is credited against the value of the apartment once the developer agreement is signed. If customer does not get a mortgage loan, the reservation fee will be refunded, but if buyer resigns of the property purchase, the amount paid will be lost. In case it is the developer that withdraws from the signed reservation agreement, the customer will receive the double amount previously paid.

The Act obliges the developer to provide an information prospectus to the apartment buyer and defines what information it should contain. Previously, such a prospectus was available at the request of a person interested in concluding a developer agreement. In the event of irregularities or deficiencies in the agreement or the prospectus, the purchaser will have the right to withdraw from the contract.

The new regulations will enable real estate buyers to withdraw from the agreement in case of significant defects of the subject of the contract discovered both during the transfer of the property and those that became apparent after signing of the property handover protocol until the date of transferring the ownership title to the real estate.

The procedure of commissioning the real estate has been clarified, together with consequences of failure to remove defects within the time limit set by the buyer. In matters of dispute, the purchaser of the property may request an opinion of a building surveyor to confirm the existence of defects. A novelty is the possibility for the buyer to withdraw from the agreement in the event of failure to transfer the ownership right to the buyer on time.

In compliance with the provisions of the Act, Developer Guarantee Fund (DGF) will be established to provide financial protection to apartment buyers in the event of bankruptcy of a developer or a bank. The tasks of the DGF will include collecting data on investments, developers, banks running escrow accounts and buyers, as well as accepting payment contributions from developers. Furthermore, DFG will be responsible for payment of due benefits to purchasers and pursuing claims against the developer or bank for reimbursement of funds paid to the purchaser.

Under the current regulations, real estate developers are obliged to collect payments from apartment buyers in banks at closed or open escrow accounts. In case of closed accounts, the bank disburses the accumulated funds to the developer after the property is transferred to the buyer. Open accounts, which are prevalent on the market, allow funds to be gradually transferred to developers in tranches according to the progress of the development project. If the developer goes bankrupt, this puts the buyer at risk of losing both the funds and the property.

The Act introduces the bank’s obligation to verify whether the developer is not in arrears with taxes, social security contributions, payments to contractors and subcontractors, as well as to check whether the DGF contributions are paid in the right amount before transferring the money from the escrow accounts to the developer. In case of financial trouble or bankruptcy of the developer company, the funds transferred by the bank will be secured in the Developer Guarantee Fund, from which in emergency situations the funds paid for the purchase of the apartment by the buyer will be returned. Moreover, in case of bankruptcy, the DGF will pay out money above the amount guaranteed by the Bank Guarantee Fund.

The Developer Guarantee Fund will be financed by contributions paid by developers to secure the money paid in by the customers. The amount of the rates will be determined by the minister competent for construction, planning and spatial development and housing, and their maximum amount shall not exceed 1% for an open escrow account or 0.1% for a closed escrow account.

Regulations introduced by the Act are to ensure security of legal transactions in real estate and to eliminate the risk of purchasers’ financial loss . The proposed solutions will oblige not only developers to incur additional costs, connected with paying contributions to DGF, but also banks, which will be obliged, among others, to invest in new IT systems compliant with the Act requirements. The costs of the real estate industry and the banking sector associated with the implementation of the Act’s provisions may be consequently passed on to buyers through an increase in property prices and mortgage loan costs.

Currently, the amendment is awaiting the President’s signature. The regulations will be effective 12 months after publication in the Journal of Laws, except for some articles which will enter into force on other dates. The application of the regulations in practice will verify whether the introduced changes significantly influence the safety of real estate trading and increase of prices on housing market.

 

Marta Polkowska
SARFiN System Data Administrator
Senior Maintenance and Development Specialist

During the press conference on fundamentals of the Polish Deal programme, the planned changes in legal aspects of single-family construction process were presented. New provisions were inspired by previously introduced solutions concerning construction of a small recreation house and provide construction of a single-family house of a covered area not exceeding 70 sqm. based only on a notification. Building permit, site manager and a construction logbook will not be required any more, which will shorten the whole construction process and limit the investor’s costs. However, it must be remembered that the assumptions of a Polish Deal programme are described in a document with no legal force, which, if accepted, will be translated into acts and ordinances drawn up by the Council of Ministers and their final shape may significantly differ from assumptions already presented.

EXAMPLARY DESIGN OF A SINGLE-FAMILY HOUSE OF A COVERED AREA UP TO 70 SQM

source: extradom.pl

Differences between building permit and a notification

At present, construction of a single-family house based only on notification is legally allowed, but in practice only approx. 1% of all construction investments are conducted that way, as the process of obtaining all administrative agreements is very rigorous and in fact only slightly differ from the process including building permit. Since last year, neither building permit, nor a site manager and a construction logbook is applicable in case of construction of a recreation house or utility building of a covered area not exceeding 35 sqm – it requires only a notification.

The greatest difference in construction under notification compared to construction under building permit relates to the date, when construction works may begin. Building permit is issued within 65 days from the date of the application and then it takes 14 days until the permit becomes final. If the application is incomplete and requires some supplementary documents, the new date is appointed by the permitting authority. Construction under a notification is much faster procedure. If the investor receives no objection within 21 days from the date of submitting a notification, the tacit consent is assumed, which means that the construction works may start immediately.

Construction of a house up to 70 sqm – preliminary assumptions

Construction under a notification does not relieve investor from obligations resulting from the applicable provisions, which include such objectives, as:

• the total usable floor area must not exceed 90 sqm on two storeys;
• one house per every 1000 sqm of a plot;
• the house must be situated 3-4 meters from the plot’s border, depending on whether the wall has or doesn’t have windows and doors and whether there are buildings on the neighbouring plot;
• the investment must be compatible with local spatial plans or development conditions, in accordance with the procedure of a notification with the architectural design.

Simplified procedures will not allow the land use violations by constructing illegal buildings or constructing many buildings on a small plot. Procedure of construction under a notification is planned to be regulated and controlled by the District Construction Supervision Inspectorate (PINB). A notification, compared to building permit, is shorter and less complicated procedure. A notification must be submitted before the date of planned start of construction works. If construction works start with no notification or before the period, when the permitting authority is obliged to process the notification, the building will be considered as illegal and legalization procedure will have to be conducted.

In purpose to simplify the whole procedure, the government plans to provide future investors with the catalogue of free architectural designs of single-family houses of a covered area not exceeding 70 sqm, which will include description of the installations and other necessary facilities.

Changes proposed in the Polish Deal programme may be considered positive by future investors, but they were found alarming by experts, e.g. in terms of proper quality or safety supervision. Houses built under a notification, with no site manager and no construction logbook, will have to comply with certain technical conditions – it will be a responsibility of an investor. The question without answer is also responsibility for consequences of possible defects of workmanship or for construction disaster. Another question refers to information normally included in construction logbook, such as documentation of surveying works, verification of natural ground base for the building’s foundations, confirmation of construction of a safe building, consistent with the architectural design. In experts’ opinion, savings on site manager may result in redundant complications and finally extension of the construction process.

Costs of construction of a house up to 70 sqm

After introducing changes announced in Polish Deal programme, the demand for small single-family houses may increase and therefore construction costs may also increase. At present, cost of finishing the building shell of a house up to 70 sqm ranges from PLN 100 to 2000 thousand. The final cost is obviously influenced by individual preferences of an investor and the complexity of a design. Price of a plot, as well as costs of site connection to the utility networks should also be taken into account. Increases in construction costs related to growing prices of building materials or inflation are already observed. However, despite possible costs increases, construction of a small house may turn out to be an interesting alternative for purchase of a flat in multi-family building, as prices of flats are already very high.

Klaudia Jastrzębska
AMRON III Development Senior Specialist, GIS Analyst

As of July 1, 2021, you no longer need to leave your home to apply for a construction permit. Via e-budownictwo.gunb.gov.pl website you may submit 23 applications related to the construction process. As the Ministry of Development, Labour and Technology (MRPiT) emphasises that this website will be a tool that simplifies and reduces the time of the construction process.

About website

The e-Budownictwo portal (e-budownictwo.gunb.gov.pl) is an official government website, where you can fill and submit documents related to the construction process. These documents are then sent online to the relevant office, which will process the application. It was launched in August of 2020. At the beginning 10 forms were posted. Now there are 23 forms and the website is still being developed. The General Office of Building Control is responsible for the management of this website. The main platform users are investors, engineers and architects. Since the day of its release, e-Budownictwo has been visited by 31,000 users and displayed about 200,000 times.

What can we do online?

The website enables citizens and investors to fill and file online applications related to the construction process. Since July 2021, the following forms are available on the website:

• a statement about the right to use the property for construction purposes,
• application for legalization of a construction object,
• application for derogation from technical and construction regulations,
• a building licence application with enclosed the plot development project or construction project,
• application for a demolition permit,
• application for a building use permit,
• application for the transfer of the building permit decision,
• application for the transfer of the permission to resume construction works,
• application for the transfer of rights and obligations arising from the notification,
• application for the preparation of a spatial development plan or a change in the spatial development plan,
• application for the initiation of a simplified legalization procedure,
• application for a decision on the necessity to enter an adjacent building, premises or the area of a neighbouring property,
• application for on the exclusion of certain obligations of the site manager,
• application for a separate decision to approve the plot development project or construction project,
• a building licence application for a temporary construction object,
• application for a change of the building licence,
• notification of completion of construction,
• notification of the intended date of start of construction works,
• notification of construction works,
• notification of demolition,
• notification of a change in the use of a construction object or its part.

HOW TO SUBMIT AN APPLICATION?

To use e-budownictwo website, you need to create an account. You can use a website without registration with a trusted profile (profil zaufany). After logging in, you will get access to your draft and sent version of your application. If you want to create a new application, press the button “+UTWÓRZ WNIOSEK”. When you choose a particular application, the application wizard will pop up. In the first step, you add the data about the investor. The next step is to insert data about your real estate. You can fill forms manually or using a map. The location of the investment can be found by using the address or clicking on the map within the plot. In the next step, we fill in the information related to a given type of application’s form. In the end, we add attachments.

When you fill in all fields, you have to download a file and save it on your disk. If you need to send the application to the office, please select “Go to GOV.PL” (“Przejdź na GOV.PL”). By ePUAP website, you can send a letter. You can log in to this website by using a trusted profile (profil zaufany) or e-ID. In the displayed window, please select the office or institution appropriate for the investment’s location, indicate the type of letter application and add a message to the office. In the text file, you can add a note that the letter is addressed to the architecture and construction administration department or construction supervision. By doing this, processing time of your application can be shortened. The attachment’s section requires a file with the application from e-budownictwo website. It is obligatory. Without this file the office cannot process the request. When you confirm the correctness of your letter, in the next step you have to sign a document. 3 forms of e-signature can be used:

• qualified electronic signature (QES)
• a trusted profile (profil zaufany)
• e-ID

After signing the document, official certification/proof of submission is sent to the electronic inbox. The date of receipt of the application by the office is equal to the date of receipt of the letter in the office’s inbox. If you add an address to your ePUAP inbox, the office will contact with you online.

BENEFITS OF THE SERVICE

An amendment to building law enabled the digitalization of the construction process. E-budownictwo portal is for all of those who prefer to handle official documents online, without leaving the house. By this, we reduce visits to the office and do not have to stay in the queue. At the same time it is supposed to reduce the processing time of the application. Communication between office workers and investors is also easier. It reduced the waste of paper. The store of documents for offices and investors was always a problem. As we know, the number of documents in the construction process is high. At the same time, it is still possible to submit an application in a traditional way in the office. About the way of submitting an application decides investors.

Agnieszka Bartoszewska
Real Estate Market Analyst

Spatial order is a broad and general concept that has a significant impact on public spaces. In addition, it is a subjective and relative concept, so it is difficult to have a universal definition of it. In the context of this article, spatial order will be understood as a multidimensional way of shaping space, the main goal of which is to achieve harmony, legibility and proportionality. Its formation should take into account social, economic, natural and cultural needs. The space, which is shaped with spatial order in mind, is tidy, of high compositional and aesthetic values, and the objects are situated in accordance with their nature and functions they are to perform.

The characteristics of a space designed according to spatial order are most often defined as:

• the harmonious arrangement of space and the presence of hierarchy in a particular arrangement of elements,
• the balance of individual components in the organisation of space and the purposeful distribution of functions (intentionality),
• the best use of space aiming to meet human needs in the most effective way (efficiency),
• associating the interest of the individual with the general good and coordinating development with higher-level needs (coordination),
• compatibility of the transformations with the environmental conditions and lack of collision of functions and spatial conflicts (conflict-free and sustainable development).

To make it easier to understand the defined term, specialists have ‘broken down’ spatial order into its constituent elements:

The first element is the urban and architectural order, which is directly related to the spatial structure, the arrangement of elements (e.g. green areas, small architecture), their size, shape and location, as well as the legibility of the structure. The second element is social order, which is a resultant of the formed networks of social relations, their durability, identification with a place, as well as aspects related to the sense of security. There is also functional order resulting from the coexistence of various functions and relations between them, saturation with social infrastructure and other utility values. Important for residents, as well as tourists and investors, determining the attractiveness of the place is also the aesthetic order, which refers to the beauty of the place, neatness and sense of order, as well as the presence of dominants improving the legibility of this space. The last one is the ecological order, having to do with the value and condition of the natural environment, nature protection, which in turn translates into the quality of life of the inhabitants, thus influencing the social order. Urban planners and architects most often understand spatial order in terms of ‘composition and aesthetics’, but spatial order is an interdisciplinary concept and should be considered more broadly, going beyond the above-mentioned point of view to include economics, politics, history and environmental protection.

It should also be borne in mind that the use of terms ‘spatial order’ and ‘spatial aesthetics’ interchangeably is incorrect, as spatial order is a broader and deeper concept. The depth of this term lies in the fact that spatial order, in addition to satisfying the basic physical needs of humans in the environment, is also aimed at satisfying spiritual and psychological needs, i.e., among others, the need for identification with a given environment or a sense of security. Spatial order should be treated comprehensively, and one of its elements is aesthetics.

The condition of spatial order in Poland

In Polish legislation, the phrase ‘spatial order’ was used for the first time in 1994 in the Act on Spatial Development. The official definition, which was introduced to the Act on spatial planning and development of 2003, states that spatial order ’is such a configuration of space, which creates a harmonious whole and takes into account all functional, socio-economic, environmental, cultural, compositional and aesthetic conditions and requirements in orderly relations’. In spatial planning, aspects related to respecting spatial order are required by law. The fact is that it is municipality that is responsible for this planning, which therefore should be equipped with competences and is responsible for the implementation of the spatial order, mainly through reliable and well thought-out Local Spatial Development Plans and the Study of Conditions and Directions of Spatial Development.

It is not a secret that the Polish space has unfortunately little to do with spatial order, and its condition is hardly satisfactory. The biggest problems of space in Poland include its lack of context, diversity in the bad sense of the word, disorder and lack of consistency. The problem is increasingly recognized by the public and discussions are being held about it. There are situations in which architects and urban planners succumb to fashion and investors, allowing for the so-called point architecture, i.e. architecture that does not fit into the surroundings and is out of context with the existing buildings. One of the reasons for this is the lack of planning concepts and people in charge. However, it cannot be said that every space in Poland is in bad condition, there are fragmentary positive examples on the scale of the city or its districts, but they are too rare to explicitly acknowledge the spatial order in Poland exists. On the other hand, if we focus on spatial order on a national, provincial or even municipal scale, we have to admit that it remains so far only an ambition.

PHOTO. 1. SPATIAL CHAOS IN POLAND ON THE EXAMPLE OF WARSAW

source: https://businessinsider.com.pl/ (access: 2021-06-16)

There are many reasons for this. The first and most frequently mentioned is the low architectural awareness and low aesthetic culture in the context of the surrounding space of Polish society. The possibilities are great, but inappropriate use of them is the cause of spatial chaos, and developing architectural and aesthetic taste is a long process, especially since this subject is discussed almost exclusively at art schools.

The literature divides the factors considered to be the cause of spatial disorder. These are legal and social reasons. Legal reasons include factors such as:

• lack of enforcement capacity,
• legislative gaps,
• lack of spatial concepts,
• low number of adopted local spatial development plans and their low precision.

It happens quite often that the only “impassable” provisions are such elements as the impassable building line or the maximum percentage of biologically active area. Such parameters as the type of materials used, the height of the development, the colour scheme or the manner of introducing greenery are defined in a very general way, as a result of which the investors have a lot of freedom in making deviations from construction projects. Moreover, in Poland the concept of the superiority of private interest over public interest is extremely ingrained, and consequently space is perceived only within the framework of one’s own property, which makes it difficult to convince e.g. investors to apply solutions compliant with spatial order, as they hide behind the right to the property. An important legal factor is the lack of a provision on spatial order in the Constitution, which is very often the case in Western European countries.

Social causes are:

• lack of financial resources,
• low social culture (e.g. belief in the primacy of private over public interest),
• low aesthetic culture,
• the current condition of the space (lack of role models),
• the desire to break away from the architecture of the People’s Republic of Poland, which resulted in a great variety of architectural forms, saturation with ornaments and kitschiness.

Spatial disorder is often the result of a combination of a bad situation and considerable socio-economic contrasts, together with corruption and the impotence of the law. Spatial chaos unfortunately leads to the death of the human friendly and comfortable city.

Recently in the Polish public space we can observe a phenomenon called ‘aestheticization’. In the simplest terms, these are activities strongly related to heritage and identity, aimed at improving the physiognomy of the city, increasing its aesthetic value. This is an arduous and difficult process, as it often requires a change in the attitude and thinking of the inhabitants, moreover in some cases also the identity of the city or the neighbourhood. These are usually actions involving the protection of historical monuments, aestheticization of the city background through the introduction of such elements as vegetation, small architecture, works of art, but respecting the spatial order and the principle of space cohesion. Such processes are important because through them the structure and urban space can be transformed. An example that did not quite fulfil the role of aestheticization is the open city gallery (Galeria Murrr), which was opened in Praga Północ (Warsaw) on the walls of the Frito Lay factory, where the foundation “Bęc Zmiana” decided to extract some colour and life from this space by allowing the presentation of modern large-format works. As a result, various artists placed their works of art on the wall in various themes.

PHOTO 2. GALERIA MURRR IN PRAGA PÓŁNOC, WARSAW

source: https://warszawa.wyborcza.pl/ (access: 2021-06-16)

The problem with this idea is that such a gallery could be created in any other space in the city, and the reaction of the inhabitants would be the same – indifferent, not starting a discussion, because the works did not ’touch’ their viewers in any way. This form of aestheticization merely marked a fragment of the city with an indication of how it should look. A contrast to the above example is the art installation “Greetings from Jerozolimskie Avenue” by Joanna Rajkowska. The project was inspired by the artist’s experiences, which in the process of creation she combined with the features and specificity of that place. The success lies in the importance the author attaches to the ‘place’ she chooses and boldly transforms, without imposing any interpretation, which is very important in this process. This art installation generates impulses for discussion about this space. To this day, the Palm evokes extreme emotions and divides the capital’s inhabitants into those open to change and different interpretations, and the followers of tradition.

PHOTO 3. ART INSTALLATION “GREETINGS FROM JEROZOLIMSKIE AVENUE”

source: https://www.odkrywamyzakryte.com/ (access: 2021-06-16)

Summary

Spatial order is an objective of spatial management and together with the principles of sustainable development form a reference system for all activities undertaken in this respect. It is an interdisciplinary concept. It brings coherence, order and harmony to the public space. In Poland, its condition is not satisfactory, we are very often dealing with spaces without context, shaped without consistency and urban planning. The accusations are often of ‘arbitrariness’, of building ‘what you want, where you want’, leading to point-scoring architecture. The problem is more and more often discussed in the Polish public debate, which gives hope. However, it cannot be said unequivocally that all public spaces in Poland without exception are characterised by spatial chaos – there are examples of high quality spaces, but this is too little to conclude that the problem does not exist.

Karol Kacprzak
Maintenance and Development Junior Specialist

Polish Deal, a new social and economic programme announced on May 15, 2021 by the Prime Minister Mateusz Morawiecki, implies new regulations intended to be some kind of an energy boost for weakened, post-pandemic economy.

As the Programme does not relate much to the economy itself, two proposals draw particular attention of the public: subsidies for housing purchases called ‘housing voucher’ and the state guarantee for mortgage borrowers. Housing vouchers are described as specific form of state support for the families expressed in precise sums of money and therefore discussed the most by Polish political and economic commentators. However, it is the second proposal, providing for state guarantee for those Poles, who intend to take out a mortgage loan for purchase a housing, but do not have money for required down-payment, that seems to have the strongest possible impact on housing market and consumers behaviour.

Is it difficult to get a mortgage loan in Poland?

At present, taking out a mortgage loan by individual involves procedure of creditworthiness examination carried out by the bank, as well as the need to have a sum of money amounting at minimum from 10 to 20% of the value of purchased property, called down-payment. Assuming the average price of a studio located in a big city at the level of approx. PLN 200 – 250 thousand (excluding Warsaw, where the housing prices often exceed PLN 300 thousand), the minimal down-payment amounts to PLN 20 – 25 thousand. Additionally, transaction calculations must include the PCC-2 tax accounting to 2% of the transaction price in case of purchase at the secondary market, plus the notary fee at the level of approx. PLN 3 – 5 thousand. A person, who intend to take out such a loan, must consider a monthly instalment in the amount of approx. PLN 1 250. By saving such amount every month, it is possible to collect necessary amount within 2 years – that period of time may be considered as a simulation of everyday life with mortgage loan taken for the following decades. Such experience will bear fruits in the future by higher borrower’s awareness of his or her ability to repay a loan.

Government’s guarantee instead of own down-payment may result in lesser financial awareness of mortgage borrowers. When situation on labour market changes or when interest rates grow, many problems with regular repayments may occur and therefore the number of non-performing loans may raise, resulting in increased number of enforcement proceedings.

Will the lack of own contribution result in additional costs for the borrower?

Government guarantees will encourage banks to change the lending policies and to grant loans for 100% of the value of financed property. It is very possible that banks’ offers regarding such loans will be less favourable than those for customers with down-payment. Banks may treat lack of own contribution as a factor of increased credit risk, which will result in additional collaterals requirement. If the loan amount is equal to the value of purchased property, mortgage itself may turn out to be insufficient. It is the most likely that margins for loans with LtV ratio at the level of 100% will be the highest on the market and additionally, granting such loans will be dependent on some supplementary products that will have to be bought by a borrower together with a loan. Finally it may turn out that a borrower will have to pay more that he or she would pay in case of taking a loan with a down-payment.

If the group of beneficiaries will be numerous, this solution may actually influence the market. No need to save money for own contribution may support the excessive indebtedness and encourage the excessive risk-taking. Current levels of interest rates and good condition of residential real estate market allow to assess that risk as low, but when housing prices start to fall and interest rates start to increase, the loans may turn out to be too high to repay.

Primary or secondary market – which one will benefit the most?

The assumption that more transactions with the government guarantee will be concluded on the secondary market seems probable, as on the secondary market it is easier to negotiate the length of the period of time needed for the bank’s credit decision to the date of finalising the transaction. On primary market, one-month period from signing the promissory sale agreement to the date of the preliminary agreement in form of notarial deed is a standard. Moreover, in purpose to increase sales, developers probably will adjust the investments to formal frames set by the government’s programme. On the other hand, persons with no own resources for a deposit will have less chances for purchase of the property in good location and in good price – such purchases will always be more achievable for buyers with financial means allowing to reserve a property until the credit decision is taken.

Summary

From the economic perspective, availability of loans with no obligatory down-payment will provide the increased inflow of money on the housing market, which will result in rises of prices. Growth of demand will also translate into increases in prices of materials and construction services, building plots and other elements included in the construction process. Certainly, it is not yet known, what scale of the guarantee programme is planned, what will be the target group and what conditions will have to be fulfilled by potential beneficiaries. When the interest rates grows and the market starts to slow down, some part of beneficiaries will not be able to repay their loans granted with the state guarantee and selling the property may not be a solution in case that price of the property will not be sufficient for total repayment of the loan.

Hopefully the beneficiaries of the government programme will not become another “Swiss francs borrowers”, who did not realize what was the currency risk, the interest rate risk and the risk of decrease in value of real estate, nonetheless decided to sing a loan agreement for many years.

Jakub Kaczor
Platform of Mortgage Borrowers Support Coordinator

COVID19 pandemic has brought significant turbulences in the real estate market. Apart from the changes of the macroeconomic situation, like a decline in GDP or an increase in inflation, it also caused important social changes, resulting from the movement restrictions or a reduction of the social trust. Introduction of the possibility to work or study remotely was also an important factor that had a significant impact on the housing market. For obvious reasons commercial real estate market, including primarily it’s retail and office sectors, was the most affected by the pandemic, while on the housing market the strongest impact of the pandemic was seen in the individual rental segment. Based on these changes, already in the second half of 2020 some observers and participants of the housing market indicated a significant increase in the interest in purchasing or building of a single-family house. It is therefore worth verifying what is the condition of single-family houses market in Warsaw agglomeration after the year of the COVID-19 pandemic.

Investors’ activity

The increased demand for single-family houses should result in an increase in the number of construction notifications or granted building permits. Central Statistical Office data show that, despite the pandemic, the number of permits or notifications for the construction of a single-family house in the Warsaw agglomeration in 2020 was actually higher than a year earlier. In year 2020, in seven poviats neighbouring Warsaw, 4 996 single-family houses building permits were obtained, which was as much as 9% more than the year before. The largest increase in the number of permits and notifications was recorded in the pruszkowski poviat – by 28%, i.e. from 587 in 2019 to 753. In otwocki and wołominski poviats, the increases exceeded 13%. The only poviat ,where a decrease was recorded, was warszawski zachodni, where only 542 houses obtained a building permit, which was 9.4% less than in the previous year.

CHART 1. DYNAMICS OF CHANGES IN THE NUMBER OF CONSTRUCTION PERMITS AND CONSTRUCTION NOTIFICATIONS WITH A CONSTRUCTION PROJECT IN 2020

source: Central Statistical Office

Among the Warsaw neighbouring poviats, it was wołomiński that stood out with the highest activity of individual investors. In 2020, constructions of 889 single-family houses were reported or permitted. The lowest number of permits and notifications, i.e. 542, was recorded in this period in warszawski zachodni.

Analysing data from the previous years, it is difficult to attribute the increase in individual investors’ activity recorded in 2020 to the COVID-19 pandemic. The upward trend in the number of submitted applications or building permits obtained in Warsaw agglomeration has been clearly visible for several years. Changes recorded in 2020 should therefore be treated rather as a continuation of this trend, especially since the data do not indicate a clear acceleration of this phenomenon after the outbreak of the pandemic.

CHART 2. NUMBER OF CONSTRUCTION PERMITS AND NOTIFICATIONS WITH A CONSTRUCTION PROJECT 2012 – 2020

source: Central Statistical Office

Price level

According to the data of the AMRON Centre, in 2020 no increased dynamics of prices of single-family houses in the Warsaw agglomeration was recorded. In all of the analysed poviats, the increase in the prices of single-family houses was similar to the level recorded in the previous periods. The highest increase in the average price per square meter of usable floor area of a single-family house was recorded in 2020 in warszawski zachodni poviat – 9.6%. High dynamics of prices was also recorded in the miński poviat – 8.2%. On the other hand, the lowest increase in the average price was recorded in poviat wołomiński – 4.36%. Throughout the whole year 2020, the highest average prices per one square meter of usable floor area of a single-family house were recorded in the following poviats: pruszkowski (PLN 5 642.45), piaseczyński (PLN 5 367.40) and warszawski zachodni (PLN 5 346.76). The lowest average prices were recorded in miński (PLN 4 317.93) and wołomiński (PLN 4 632.75) poviats. It is worth noting that the dynamics of changes in the prices of an average single-family houses in the analysed locations corresponds to the level of increases in the flats prices in Warsaw agglomeration. This allows for the conclusion that there is no additional demand impulse in the growth of prices of single-family houses during the pandemic.

It is also difficult to find evidence of such an impulse in case of the single-family building land market. According to the AMRON Centre’s data, the average price of 1 m2 of a plot area in seven poviats around Warsaw has remained at a level close to PLN 200 for several years.

CHART 3. AVERAGE PRICE OF 1 M2 OF HOUSING UNITS, SINGLE-FAMILY HOUSES AND SINGLE-FAMILY BUILDING plots IN 7 POVIATS NEIGHBORING WARSAW IN 2012 – 2020

source: AMRON System

A review of basic data from the market of single-family houses in the Warsaw agglomeration allows to draw a conclusion that the impact of the coronavirus pandemic on this segment of the residential real estate market is very limited. It seems that at the moment there was no noticeable, excess increase in demand for both land for single-family housing and for single-family buildings, caused by factors related to the pandemic. The number of applications and permits granted for the construction of single-family houses, average prices of land and houses remain in the trends observed on the market for a long time. Therefore, the conclusion about the resistance of this market to the factors originating in the COVID-19 pandemic seems to be more legitimate. Perhaps, however, the time that has elapsed since the beginning of the pandemic is still too short for them to change the situation on this market in a decisive way.

Jerzy Ptaszyński
Research and Market Service Director

Every city faces many economic, social and environmental challenges. Therefore, effective solutions are needed to mitigate these problems in order to ensure the best possible quality of life for city dwellers. Increasingly, technology is being used to influence whether a city is smart. Currently there is no single common definition of a Smart City. The term can be understood in different ways, but it is most often identified with a city, in which public issues are addressed using information and communication technologies (ICT). These technologies play a significant role in supporting cities, making them a better place to live by enabling better energy use, improving transport and introducing smart services, such as mobile apps. All these aspects should form an integral system involving citizens in the development process.

The term Smart City has been around for a long time and more and more cities are being recognized as “smart”. For this reason, there was a need to compile lists of the smartest cities. One of the most popular rankings is the Smart City Index.

Smart City Index

The Smart City Index (SMI) is a report first produced in 2019 by IMD (The Institute for Management Development, which is one of the world’s top business schools located in Switzerland) in collaboration with Singapore University of Technology and Design (SUTD). The second edition was published in 2020 also by IMD and SUTD.

In the context of the Smart City Index, a “smart city” continues to be defined as an urban area that applies technology to enhance the benefits and reduce the shortcomings of urbanization for its residents. The research is primarily based on the perceptions of those, who live and work in the city in order to best capture how they perceive the living conditions changing due to information technology. The ranking includes 109 cities. A survey of 120 residents was conducted at each site to assess existing infrastructure and technological equipment and available services in five key areas, i.e. health and safety, mobility, activities, opportunities and governance. The positioning of cities was also influenced by the Human Development Index (HDI), which is a synthetic index based on the average of indices concerning health (average life expectancy), education (enrolment rate and illiteracy rate) and GDP per capita, and is constructed in a way allowing to determine extreme, target values of the abovementioned features. The HDI is used in reports produced by the United Nations Development Programme (UNDP).

Overview of the survey’s results

Singapore topped the Smart City ranking, retaining its position from last year. The next smartest cities are Helsinki (Finland), Zurich (Switzerland), Auckland (New Zealand), Oslo (Norway), Copenhagen (Denmark), Geneva (Switzerland), Taipei City (Taiwan), Amsterdam (Netherlands) and New York (USA). It is noticeable that most of the cities in the top ten are European. Warsaw was also ranked at 55th position (up 6 places from 2019).

For selected cities, the results of surveys conducted among residents have been published. Respondents identified priority areas that need attention and action. In Warsaw, the greatest demand is for affordable housing. Although this is a global phenomenon, it should be kept in mind that Warsaw’s population density as of 2019 is 3 437 people/km2 (compared to 8 479 people/km2 in Singapore). Another priority area was air pollution, which often exceeds acceptable standards in Warsaw. The unemployment rate in Warsaw was only 1.8% (as of 2020) and unemployment was the least frequently indicated problem. Despite this, research has shown that residents of Warsaw do not feel satisfied with their work. Another priority area appeared to be a road congestion, which causes traffic jams.

The other important part of the survey was to find out the position of residents on three aspects of privacy and the share of cashless transactions:

• willingness to share personal data in order to improve road capacity – 46.9% of Warsaw residents responded in the affirmative (for Singapore the result was 65.6%);
• feeling comfortable with using facial recognition technology to reduce crime – 62.1% (for Singapore, it’s 71.3%)
• a sense of increased trust in government due to available online information – 54.7% (for Singapore it is 72.5%);
• share of non-cash transactions – 80.9% (for Singapore it is 71.0%)

In the next stage of the survey, Warsaw residents rated existing infrastructure and technological equipment and available services in five areas, i.e. health and safety, mobility, activities, opportunities and management. The results are presented in such a way that each indicator shows the score for the city compared to the group it was classified into according to the Human Development Index (HDI). In Poland, both the existing infrastructure and technology were most often rated above average. In terms of health and safety, the biggest problem is air pollution and the inability to find housing, the rent of which does not exceed 30% of monthly earnings. On the other hand, access to applications that enable effective monitoring of air pollution and applications that make it easy to dispose of unnecessary items such as clothes were rated very highly. For mobility, traffic jam tracking apps were found insufficient.

Another area of study was activities. Both green spaces and cultural activities in Warsaw were rated highly. In terms of opportunities (work and school), employment opportunities (as evidenced by the low unemployment rate), access to good schools, job creation and online access to job opportunities were rated very positively. However, it was also pointed out that the teaching of computer science in schools is not at a satisfactory level and the problem is the speed of the Internet. The final area that was assessed was management. The results show that the introduction of online services has increased the participation of residents in municipal decision-making.

Summary

The results of the ranking are optimistic, as usually individual aspects were rated above average. The shortage of affordable housing remains the biggest problem. The pandemic and its associated movement ban has reduced residential sales and rental transactions and loans in the second quarter of 2020. The situation in the country may have encouraged those, who planned to buy a property, to hold off on their purchase decisions and wait for prices to fall. However, according to the data published in the AMRON-SARFiN 4/2020 Report, the average price per sqm of an apartment in Warsaw has not decreased, and the demand for loans has gradually increased since August 2020. Moreover, the pandemic had not a significant impact on housing construction, with an extraordinary number of apartments and houses being completed in 2020. While other aspects of city life, such as improved mobility and the use of increasingly new technological solutions, may influence the perception of Warsaw as a ‘smart’ city, even the pandemic proved to be an insufficient stimulus to lower prices on the real estate market.

Daria Łaskowska
Maintenance and Development Specialist