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The change to the Spatial Planning and Development Act is a part of the National Reconstruction Plan. The reform is expected to improve cooperation between local government units and investors. It assumes simplification of planning procedures, clarification of rules for issuing land development decisions, or replacement of the study of conditions with a general plan. The draft spatial planning reform was presented at the beginning of this year. The amendment to the law is currently under consultation. It is likely to be enacted and come into force in early 2023. The following are some of the significant changes and assumptions that will take effect then.

The National Reconstruction Plan assumes that the amendment aims, among other things, is to adopt general plans for municipalities by mid-2026. The new planning tool, which will be the municipality’s general plan, would replace the existing study of conditioning and the directions of the land use planning. Importantly, the general plan would be enacted to the degree of a local law. It is supposed to be a simple and concise set of rules telling about the development of the municipality’s space. The uncomplicated form of the general plan is to make it easier to read the contents of plans adopted in individual municipalities and to standardize them. There will also be a new act, the Integrated Investment Plan, which is a type of local plan. It is to be enacted by the municipal council giving the opportunity to locate the project taking into account the principles of spatial order. It will be applied to larger developments, not just residential. The municipality and the investor will conclude an urban planning agreement, which will make it possible to clearly define mutual obligations and detailed rules for the implementation of a specific investment.

The project of the law provides for the possibility of establishing in the general plan accessibility standards for social infrastructure – elementary school and public green areas. The draft specifies the distances that should divide a registered plot of land from certain elements of social infrastructure. Consequently, if accessibility standards are established in the municipality, the issuance of a Decision on Land Development and Management Conditions for buildings will be possible if each of the registered parcels of land that are the subject of the project meets infrastructure accessibility standards through access to the facilities, and there are access roads along public roads.

Changes to the law will also apply to the process of issuing development decisions. The amendment provides for linking the decision to the municipality’s general plan, particularly with regard to urban functions and indicators. Decisions on land development will be issued only in areas where this will be permitted in the municipality’s general plan. These assumptions are intended to contribute to stopping and monitoring the uncontrolled spread of development. The change to the law also provides for the introduction of a time limit on the validity of the decision on land development – currently it is issued without a time limit. If the amendments go into effect, the decision will expire 5 years after the date on which the decision became final. After this period, it will not be possible to apply for a building permit based on this decision. Importantly, the amendment is also expected to apply to decisions issued before its enactment.

The proposed law lists additional parameters and indicators that were not previously considered when issuing a regulation on how to determine the requirements for new development and land use in the absence of a local plan. Parameters that have not been listed so far are the maximum and minimum intensity of development, the minimum percentage of biologically active area (land area that is not built on, but is covered with plants and allows natural water retention) in relation to the land area, and the minimum number of parking spaces.

The project act also provides for a change in the system for imposing the planning fee. According to the current legislation, the planning fee is imposed for two reasons: the increase in the value of the property in connection with the enactment of the local plan and the disposal of the property within 5 years from the date of entry into force of the plan, and these conditions must be met at the same time. The law determines that the amount of the fee cannot be higher than 30% of the increase in the value of the property and is charged on a one-time basis. In practice, it happens that owners of a property whose value has increased as a result of the approval of the plan wait 5 years before selling it, and after this period they sell it without paying the planning rent. The proposed paragraph on the fee in connection with the increase in value of the property reads as follows: „If, in connection with the enactment of the local plan or its amendment, the value of the real estate has increased, the mayor, mayor or city president shall charge the owner or perpetual usufructuary of this real estate a fee in the amount of 30% of the increase in the value of the real estate, constituting the municipality’s own income”. This means that the basis for imposing the planning fee will be the fact of the increase in the value of the property as a result of the enactment of the plan, whether or not the property is sold, and the amount of the fee will be 30% of the increase in the value of the property. Similarly, the fee will be charged if the value of the property increases as a result of the issuance of a development decision. This change will eliminate the habit of delaying the sale of real estate for 5 years after the plan is enacted.

One of the innovations expected to come into effect in 2026 is the introduction of the Urban Planning Registry, which is an ICT system. The Registry will be a source of planning and land use planning data, and will contain documents generated during the preparation of planning acts, administrative decisions related to planning, etc. It is to be a free, integral information system available to all interested persons.

The draft law on amendments to the Law on Spatial Planning and Development indicates significant changes affecting the creation of space. The topics listed above are only part of the planned changes to the legislation. The amendment is quite broad in scope, and aims, among other things, to eliminate the problem of incidental and uncontrolled development of areas not covered by local plans. One of the more important changes is the introduction of a general plan, defining the municipality’s spatial policy, to replace the existing study. An important change is the revolution of imposing a planning fee. Which results in increased revenues for municipal budgets. Currently the draft is at the opinion stage, but in all likelihood it will be passed soon. It is worth to follow the next stages of work on this reformation.

Małgorzata Kwiatkowska
Maintenance and Development Junior Specialist

In times of rising inflation, it is good to find the right way to protect and multiply your savings. There are many options for increasing capital, such as purchasing of government bonds, shares on the Stock Exchange, mutual funds, setting up deposits and savings accounts, investing in gold or real estate. The tangible nature of property has the advantage over other forms of capital investment that it gives a sense of real ownership. In the case of rental properties, it is additionally possible to earn a passive income. Therefore, investing in real estate is a popular method of saving.

There are many ways to make money from real estate. They differ, among other things, in the rate of return on investment or capital investment risk. The most common forms of investing in real estate are land purchase, flat for rent, business premises and, more and more popular, house flipping (purchase of an apartment at a bargain price for renovation and selling it with profit after renovation), second home (purchase of a second apartment, which can be made available to tourists for a fee during absence), condo-hotel and aparthotel (the purchase and rental of a room or an apartment without the need for management, as all maintenance and tenants search activities are performed by the operator).

Buying a flat for rent has many advantages, including:

• securing of the capital,
• low risk of losing the invested money,
• possibility to benefit from tax reliefs,
• the possibility of using the property as collateral for a mortgage loan for the purchase of another property,
• high chance of a return on invested capital over time,
• generating passive income, i.e. steady cash inflow from rent.
• It should not be forgotten that investing in rental properties also has some disadvantages, such as:
• the need to have large financial resources for the purchase of property,
• cyclical additional fees, including rental tax and so-called hidden costs (costs related to interruptions of demand in short-term rentals or costs of servicing and consumption of the flat),
• long payback time,
• the risk of losses associated, for example, with rising interest rates on loan-financed properties.

As owning a flat is often a secure investment, many investors choose to buy holiday flats. Such a property entices not only with the anticipated profits, but also with the possibility of using it as owners.

When purchasing a holiday apartment that is expected to generate a reliable income, particular attention should be paid to its location. Each place is characterised by its own seasonality. Seaside and Warmia and Mazuria are visited by tourists mainly in summer. The season in seaside and lakes resorts lasts mainly from June to September and holiday flats remain empty for most of the year. Slightly shorter, but more frequent holidays are planned by tourists in mountains. Resorts located in the south of Poland are visited both in summer and winter. On the other hand, large cities are characterised by less seasonality, as they are frequented regardless of the weather.

The attractiveness of the region is very important. Tourists usually expect close proximity to the beach, ski lifts, hiking and cycling trails, green areas, monuments and attractions in the area and restaurants and shops. When choosing the perfect place to buy an apartment for short-term rental, it is worth paying attention to the amenities available in the facility or its vicinity, such as a swimming pool or a children’s playground.

When considering the purchase of a holiday property, it is important to choose the type of property – whether it should be an independent holiday apartment (managed personally or by an external company), condo-hotel or aparthotel.

Independent apartments are a good investment for people, whose priority is their own place where they can spend their holidays, rather than earning a rental income. In this case, the investor decides on his own about interior fittings, has an impact on the costs of servicing the premises and the amount of rental charges. Additionally, he can use his property at any time.

A condo-hotel is a hotel facility consisting of legally separate self-contained commercial premises. Flats generally consist of 1-2 hotel rooms with a bathroom. The option with a kitchenette is rarely available. On the other hand, in case of aparthotels, the investor has ownership of the entire apartment. From the end-user point of view, the mentioned types of objects are the same, as they are aimed at people looking for short-term rental properties. Both objects are managed by specialised companies that run the reception, as well as service guests and premises. For the services they provide, they receive part of the rental income, while the rest of the money goes to investors. If you want to invest your capital in a condo-hotel or aparthotel, it is worth carefully checking the operator of the selected object and the provisions of the contract.

Buying a property in an attractive location is associated with a very large expense. Prices of premises in prestigious seaside resorts such as Sopot, Hel, Gdańsk, Gdynia, Władysławowo, Międzyzdroje or mountain resorts such as Zakopane, Białka Tatrzańska, Szczawnica, Karpacz, Szklarska Poręba, are the highest and amount to the rates in the largest Polish cities. The most expensive real estate can cost even tens of thousands of zlotys per square meter. At the same time, the profitability of the most attractive apartments, finished to a high standard, can reach up to 8%.

The very high prices of flats in Polish resorts are due to the specific nature of this market. A significant part of the investment is characterised by a high standard of an apartment and a prestigious location, which affects the prices for accommodation. The final price per night also depends on factors such as the amenities available or the number of beds. On average, the cost of renting an apartment is several hundred zlotys per night.

According to the Central Statistical Office, until 2019 there was observed a steady increase in the number of hotel guests. In 2019, the number reached a record of 23.5 million tourists. Due to the outbreak of the coronavirus pandemic and, consequently, the introduction of lockdowns, during which hotel operations were severely limited, in 2020 there was decline of 53%, to 11.1 million people. In 2021, the number of hotel guests amounted to 14.4 million, despite the difficult beginning of the year resulting from the shortened winter holidays and the introduction of maximum hotel occupancy restrictions. Therefore, when comparing the year 2021 to 2020, we can see 29% increase in the number of tourists. However, it is not yet at pre-pandemic level.

GRAPH 1. NUMBER OF HOTEL GUESTS IN POLAND (mio) 2015-2021

source: own study based on the Central Statistical Office data

When considering the decision to invest capital in a holiday apartment, it is important to bear in mind that investing in holiday properties involves considerable risk. The best example are the events of recent years related to the coronavirus pandemic. The consequences of these events can be seen, among other things, in the above-mentioned decrease in the number of hotel guests. Nevertheless, the holiday real estate market is constantly evolving.

According to the report “Hotel and condo-hotel market in Poland 2022” prepared by the Emmerson Evaluation, the supply of investment apartments in condo-hotels and facilities with holiday flats until the end of the first half of 2022 was, respectively:

• in the seaside areas: 18 451 apartments,
• in the mountain areas: 12 498 apartments,
• in the Warmia and Mazuria: 964 apartments,
• in the agglomerations: 8 744 apartments.

According to the forecasts contained in the aforementioned report, by 2024 the number of investment apartments will increase by 13.9% in the seaside area (2 556 flats planned to be built), by 20.4% in the mountain area (2 555 flats planned to be built), by 27.5% in the Warmia and Mazuria (265 flats planned to be built) and by 12.2% in the agglomerations (1 066 flats planned to be built).

Most often, real estate increases in value over time, so it seems ideal for capital investment and multiplying savings. However, it should be remembered that such investments are exposed to various unknowns and risks. The decision to invest in a holiday property should be preceded by a thorough analysis of the situation in the region, as well as one’s own needs and possibilities. Only on the basis of such an analysis is it possible to evaluate the profitability of the investment.

Monika Kubisz
AMRON System Coordinator

Year 2022 is another period of dynamic increases in home maintenance costs. According to data from the Central Statistical Office in July this year, these costs were higher than in the corresponding period of 2021 by an average of 25.3%. The fastest increases were in gas and fuel costs – by 44.9% and as much as 131.2%, respectively. There are approximately 5.5 million single-family buildings in Poland, inhabited by more than half of our country’s population. Despite the considerable activity of individual investors observed in recent years, most of them are still buildings that do not meet current functional and technical requirements, including in particular those relating to thermal insulation. Many of them are not insulated at all, heated by heat sources with low efficiency and high emissions at the same time. The mismatch of the size or functional layout of the building to actual needs of people living in it also turns out to be a problem, especially in context of bearing maintaining and heating costs. This mainly applies to located in rural areas single-family houses, built in the 1980s and 1990s, which were supposed to accommodate two or sometimes even three generations of families. Thus, despite the fact that Poland still ranks fifth from the bottom in Europe in terms of percentage of people living in overcrowded apartments, many houses, requiring significant heating expenditure are at the same time at least partially unused. Also, a large number of houses built after year 2000 leave much to be desired in terms of energy efficiency.

The applicable regulations force designers and investors to meet higher and higher standards in terms of energy efficiency of buildings. It seems however, that in this case an equally important factor is the awareness of individual investors who are more and more rational in their approach to building a house. This applies not only to the choice of construction technology of the building or the method of its heating, but also to a change in the approach to its functionality and aesthetics. This change can be seen in catalogs of houses projects. Complex shapes of buildings with equally complex, multi-slope roofs, increasing the area of ​​external surfaces and thus energy losses are less and less popular. Instead, buildings with simple shapes and solutions aimed at saving energy, such as foundation slabs or energy recovery devices, are steadily gaining in popularity. Importantly, the house does not have to be huge anymore. According to AMRON Centre data, the average usable floor area of ​​houses built by both individual investors and developers has been systematically declining since the turn of the century. Chart 1 shows how the average floor area of ​​single-family houses built in Poland has changed over the last 70 years.

CHART 1. AVERAGE FLOOR AREA OF COMPLETED SINGLE-FAMILY HOUSES

source: AMRON

From the 1950s until the second half of the 1990s, we had a steady upward trend in the average usable area of a house in Poland. The size of 100 square meters was exceeded already in 1955, and the maximum average area of the house was recorded in 1997. It was on average 164.12 square meters. Interestingly, the area of houses built in urban areas throughout this period was significantly higher than those located in rural areas. In case of urban areas, the maximum floor area was recorded in 1996 and amounted to 173.75 square meters, while in case of houses built in rural areas, the maximum average usable area was recorded in 1997 and amounted to 150.76 square meters.

CHART 2. AVERAGE FLOOR AREA OF COMPLETED SINGLE-FAMILY HOUSES (URBAN AND RURAL AREAS)

source: AMRON

The increase in the floor area of ​​houses in this period was related not only to increasing level of wealth of the society, but also to the limited possibility of meeting housing needs in a way other than building a house that could accommodate even several generations. Social and economic changes that have taken place in Poland since the beginning of the century, including changes in the real estate market, dynamic growth of the real estate development sector, increase in the availability of mortgages and housing have caused a decisive change in investment and purchase decisions of Poles and a reversal of the trend. Consequently, the average floor area of ​​a house built in 2021 was 139.12 sqm, which was more than 15% lower than that recorded in 1997. As before, larger houses continue to be built in cities or their immediate vicinity. For urban areas, the average area of ​​houses was 141.76 square meters, and as for rural areas it was 133.53 square meters, which is 18.5% and 11.4% less than the end of the 1990s, respectively.

The data on the turnover structure shows that the trends seen in the activities of individual investors also apply to the preferences of home buyers. The average usable area of ​​the house for sale in 2021 was 139.34 square meters and was over 35 square meters lower than in 2000. A comparison of the market structure in terms of the size of usable area indicates a significant increase in popularity of houses with an area of ​​up to 100 square meters. Their market share in 2000 was 18.8%, while in 2021 it was already 27.4%. There has also been a slight increase in the market share of the most popular houses, with a usable area of ​​100 to 150 square meters. In 2021, they accounted for 41.7% of transactions concluded on the market, by 0.8 pp. more than in 2000. The share of all other house size categories was significantly lower than in 2000.

CHART 3. SINGLE-FAMILY HOUSES MARKET STRUCTURE IN POLAND IN TERMS OF USABLE FLOOR AREA 2000 – 2021

source: AMRON

The structure of the single-family houses market in terms of building age shows that the majority of houses sold are still buildings from the old stock, i.e. dating from before 2000. Buildings that may meet today’s functional standards accounted for about 40-41% of the properties sold. Given the quality of older buildings however, it must be assumed that a significant portion of them are purchased either with the intention of demolition or of recreational use.

CHART 4. SINGLE-FAMILY HOUSES MARKET STRUCTURE IN POLAND IN TERMS OF THE AGE OF THE HOUSE IN 2021

source: AMRON

A comparison of the Polish market of single-family houses with the markets of other European countries shows a convergence of the supply structure in terms of house size with the markets of northern European countries (Sweden, the Netherlands). Slightly different is the structure of the market in Germany, where by far the larger houses – from 150 to 300 square meters – have definitely greater share. For obvious reasons, the markets of France or southern European countries are also quite different, with a characteristic large segment of houses exceeding 300 square meters.

CHART 5. CHART 4. SINGLE-FAMILY HOUSES MARKET STRUCTURE IN POLAND IN TERMS OF THE AGE OF THE HOUSE IN 2021

source: own study/AMRON

Despite this convergence, which may theoretically indicate a certain maturity of the market and its participants, it cannot be assumed that the pace of change in the single-family home market will slow down. In view of the current and expected social and economic changes in the market environment, it seems more likely that they will even accelerate, both in terms of house size and quality. Rising energy costs will certainly cause the heating bill to be an even more important argument for taking the decision to purchase a single-family house.

Jerzy Ptaszyński
Research and Market Service Director

According to an annual survey conducted by the Public Opinion Research Centre (CBOS), in 2022, as many as 58% of surveyed Poles declared having savings, compared to 23% in 2007. Despite the significant increase in the number of savers, Poles are still reluctant to invest their money, which loses its value over time. It is well known that inflation is the enemy of savings and investments. Rising prices of goods and services reduce the purchasing power of the money and force people to look for ways to secure their savings. In recent years, the purchase of real estate has been a particularly popular way to invest savings among investors managing larger amounts of capital. This was facilitated by low interest rates and relatively cheap housing loans. However, property prices have also risen significantly in a relatively short period of time and the increased interest rates in recent months contributed to an increase in the amount of mortgage instalments. As a result, the creditworthiness of buyers has decreased and the number of new loans granted fallen. Nowadays, the purchase of a property involves even more funds.

Due to the inflation, money kept in a piggy bank at home or at a regular personal account will diminish in value over time. According to the Ministry of Finance’s inflation calculator, PLN 10 000 accumulated in June 2002, 10 years later had a purchasing power of PLN 7 528.53, and 20 years later, in June 2022, only PLN 5 729.80. Despite the fact that money depreciates over time, it makes sense to start saving as early as possible for two reasons. Firstly, the earlier you start the more you will set aside. Secondly, systematically deposited funds that are at the same time properly invested will accumulate over time and increase capital like a snowball. This is facilitated in particular by the use of financial instruments based on the compound interest mechanism.

Compound interest can be defined as a type of return on a money deposit that earns interest on the interest over time. In case of fixed-term deposits, the interest accrued for a given period using a certain interest rate is not paid out as profit, but is added to the capital contribution. This adds up to the higher profit that the money will generate over the next savings period. Thus, the longer one saves, the higher the profit per month, quarter or year. Although this might be tedious process, in the long term it allows to earn more income than with a fixed interest rate deposit, where, once the interest on the deposit or savings account is capitalised, the profit is transferred to a designated bank account.

Compound interest formula:

Final amount = initial amount x (1 + interest rate) ^ number of investment periods)

For example, by putting aside PLN 300 every month on a long-term deposit with an interest rate of 2% per year, where the profits are capitalised monthly and added to the capital, after 10 years we will accumulate PLN 39 051, where the contribution alone is PLN 36 000 and PLN 3 051 is profit. By putting aside the same amount for 20 years under the same conditions, we will collect almost PLN 85 000, where our contribution is PLN 72 000 and the profit is PLN 12 965. On the other hand, if we save for 30 years, our contribution would amount to PLN 108 000, and the profit would be PLN 30 947, which gives a total of almost PLN 139 000. In comparison, by setting aside twice as much, i.e. PLN 600 per month on a deposit with the same interest rate and monthly capitalisation for 15 years, we would collect PLN 122 159 of which PLN 14 159 is the profit. Therefore, in case of compound interest, saving the same amount (PLN 108 000) in the long run is more profitable, as it generates more proceeds.

Compound interest can also be helpful in developing strategy for playing the stock market. This mechanism is used in the swing trading method, which involves buying and selling the same instrument at a high frequency depending on its fluctuations. In the meantime, the money earned are reinvested, making capitalisation happen over and over again. The compound interest mechanism is also used by securities that pay interest on an ongoing basis, such as shares, which pay dividends, or bonds, that pay coupons to their investors. Still investing in the stock market is much more risky than placing funds in bank deposits and a good knowledge of the market, investment rules and financial instruments is required.

The construction of the mortgage loan is also based on compound interest to some extent, but the mechanism is reversed – interest is charged on the total amount of the loan from the first day of repayment. As a result, the borrower pays back up to twice the amount borrowed. In contrast to saving, where the mechanism of compound interest accelerates with time and the increasing amount of capital, in case of a loan, repayment is designed to stop this process. Therefore, the shorter the repayment period, the lower the cost of the loan.

Compound interest can be used for saving as well as investing and borrowing, and the effects of the mechanism may or may not be beneficial. It usually takes time to see the results of saving forasmuch the process is laborious. When using compound interest, it is important to be systematic and patient. Even if the return rate is low in the first few months or years, it is crucial to continually reinvest the money. The real power of the investments made is noticeable after several years. Nowadays, while inflation reaches 15% it will be rather difficult to achieve a return that brings our savings up to the level of inflation without high cash outlays or the burden of the investment risk. However, we can reduce the loss by properly investing capital, for example in financial instruments offered by banks. The increase in interest rates made by the Monetary Policy Council of the National Bank of Poland gives hope for more favourable conditions for investing and multiplying capital in banks.

Marta Polkowska
SARFiN System Data Administrator
Senior Maintenance and Development Specialist

On July 1, 2022, the act on protection of rights of buyers of residential premises or single-family houses and the Developer Guarantee Fund (DFG) entered into force. It ensures the protection of payments made by customers who buy flats or houses on the primary market, the sale of which started after 1 July 2022.

Changes for buyers

The law changes provide full protection for buyers of new flats or single-family houses. The principal of the DFG is similar to the Tourist Refund Fund – it guarantees return of payments made by buyers in case of:

• the bankruptcy of the developer and discontinuation of the investment;
• withdrawal by the receiver or the insolvency administrator from the contract with the retail customer;
• failure of the bank that keeps the escrow account and in case of deficient funds from the Bank Guarantee Fund (maximum guaranteed return from Bank Guarantee Fund amounts to EUR 100 000 per one customer per bank);
• the buyer’s withdrawal from the contract (for example if the developer does not transfer the property ownership right within a fixed period or does not remove the substantial fault or defects), unless the client has already received his money back.

The main aim of a new law is the protection of buyers. The changes are to prevent abuses by developers and other entities and to strengthen the rights of clients. As in the Tourist Refund Fund – the dues are added to the price of the property, so at the end, buyers will have to bear the cost.

Changes for developers

The changes in law and establishment of the DFG relate to new flats, the sale of which has started from July 1, 2022. By the new law, developers must set up a special residential trust account for each new investment. In addition, developers are obliged to submit data on developer projects and developer contracts to the DFG within a specified deadline. Most important and controversial are contributions that developers must pay to DFG.

The amount of the DFG contributions is determined by the regulation of the Minister responsible for construction, spatial planning and housing.

The current contributions account for:

• 0.1% of each payment made by the purchaser if the developer accepts deposits into a closed residential trust account (the gathered funds may not be withdrawn by the developer until ownership right has been transferred to the purchaser);
• 0.45% of each payment made by the purchaser if the developer accepts deposits into an opened residential trust account (the gathered funds may be withdrawn by developer in tranches, after each stage of the project carried out in accordance with the investment plan).

For example, the DFG contribution for the full amount paid by the purchaser of a flat valued at PLN 500 000 amounts to PLN 500 (in case of a closed residential trust account) or PLN 2 250 (in case of an opened residential trust account).

The new rules will result in increases in cost of investments and the investment risk. In addition, there are also costs related to the reporting obligation to the DFG.

Effects of the DFG on real estate prices

In 2020 and 2021, the situation on the mortgage and housing market and the achieved results were analysed with respect to the limitations related to the pandemic risk of coronavirus. In 2022, the real estate market environment changed dynamically.

The most important factors shaping the situation on both residential real estate market and mortgage market in the first half-year of 2022 were:

• arrival of a significant number of refugees from Ukraine (nearly 2.5 million people reached Poland by the end of March) as a result of the aggression of the Russian Federation in Ukraine. The inflow of refugees has fundamentally changed the situation on the rental market, putting strong pressure on rent increases;
• sevenfold increase in NBP interest rates from 1.75% to 6.50% (as of 8 July 2022);
• dynamic increase in the inflation rate – in June 2022, the consumer price index of the Central Statistical Office amounted to 15.6% compared to the corresponding period of the previous year the same period last year;
• a number of negative consequences of Russian aggression in Ukraine for housing construction, particularly with regard to the availability of labour.

In Centrum AMRON’s opinion, transaction prices per square meter will continue to grow this year, although at a much slower pace than in the period from 2018 to 2021. Price increases will result also from higher construction costs, caused among others by rapidly rising inflation. Dynamically rising level of inflation and new tax rules under the Polish Order with its subsequent adjustments and changes, introduced uncertainty as to the future economic situation, as well as to the future income of potential borrowers and housing buyers.

In most of the largest Polish cities, increases in the average transaction price of 1 sqm of usable floor space continued, however with a much slower dynamic. The highest increase in the average nominal price, by 2.70%, was recorded in Warsaw, where the average transaction price in the first quarter of 2022 accounted for PLN 11 382/ sqm. The first decrease among the largest Polish cities was also recorded. The average price in Gdansk decreased by 0.44%. It should be noted that in none of surveyed locations the average prices increase exceeded the level of 3%. Taking into account the level of inflation recorded in the first quarter of this year (3.80%) it means that in real terms, the average prices of 1 sqm of apartments decreased in all analysed locations.

In the opinion of the Polish Association of Developers, the dues related to the DFG will generate an increase in prices of homes and flats by about 2%. The new rules apply to all companies in the developer sector, so that they will not affect the competitiveness of particular projects or undertakings. The increased costs of developers will definitively be transferred to the buyers. However, due to the multiplicity of factors, which have recently shaped the market, it is currently difficult to determine how strong will be the direct or indirect nominal impact of the DFG on the prices of flats or single-family houses.

Agnieszka Bartoszewska
Market Analyst

Buyers’ behaviour on the real estate market is often the subject of analysis by economic scientists and real estate professionals. Preferences are divided into revealed and declared. Declared preferences refer to the behaviour of potential consumers at the time of the interview or survey. The other ones relate to the actual market choices made by consumers and can be analysed using the transaction prices database. The main objective of the survey of buyer preferences is to gain knowledge of what influences the decision to purchase a dwelling, while also influencing demand on the housing market. Analysis of the results of the cyclical surveys makes it possible to determine which offers best meet the expectations of potential purchasers and may contribute to adjustments in housing policy, which may ultimately lead to a better meeting of housing needs. Influential factors are the attributes of a property and allow an evaluation of the property in terms of e.g. location, transport accessibility, space, aesthetics, infrastructure and service facilities. Other attributes that potential buyers usually pay attention to are the availability of green areas, proximity to cultural and sports facilities, and in Warsaw, the proximity of the subway is an additional big advantage. It should be noted that preferences also depend on the living situation of buyers, as young, single people have different requirements, while families with two children have different ones. A fundamental role when buying a property is the price, as it is often a blocker to buying an apartment despite meeting expectations in other aspects. Considering the attributes of the apartment, the area of the apartment, the number of rooms, the floor of the premises or even the standard play a big role. This article is based on data on transaction prices of primary and secondary market flats in 2021 in Warsaw from the AMRON database.

One of the factors determining consumers’ decisions to purchase real estate is the floor area. Surfaces have been divided into groups according to the classification used by the National Bank of Poland.

TABLE 1. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM BY AREA

Category	Area	Share of transactions	Average price per sqm
Small	up to 40 m2	18.33%	12 216.45 PLN
Medium	from 40.01 to 60 m2	44.13%	10 720.52 PLN
Large	from 60.01 to 80 m2	23.75%	10 238.86 PLN
Very large	above 80.01 m2	13.78%	10 470.36 PLN

source: own elaboration based on AMRON database

GRAPH 1. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM BY AREA

source: own elaboration based on AMRON database

Analysing the above data, it can be concluded that medium-sized flats, with areas between 40.01 m2 and 60 m2, are the most popular. 44.13% of the analysed transactions were in this market segment, and the average price per square metre amounted to PLN 10 720.52. Large flats came second in terms of the number of transactions (23.75%) – the average price per square metre for flats between 60.01 and 80 m2 was the lowest and amounted to PLN 10 238.86. Transactions of small flats represent 18.32% of the sample, although the average price per square metre in this segment is the highest and amounted to PLN 12 216.45 (the difference with the cheapest category amounted to PLN 1 977.59). It is worth adding that the total price of this type of dwelling is usually much lower than that of medium, large or very large dwellings, and often such an area of a dwelling is enough for one-person households. The smallest share (13.78%) in the number of transactions is accounted for very large flats. A discouraging factor is most likely the high total price per flat.

Another analysed attribute is the number of rooms. Two- and three-room dwellings were the most popular among buyers, with a total of more than 75% of all transactions in the sample. In second and third place were four-room flats and studio flats, with 11.99% and 10.23% of recorded transactions. Once again, the studio flats were the most expensive considering the average square meter price – 12 551,38 PLN. It is worth mentioning that the larger the number of rooms, the lower the average price per sqm. Five- and six-room flats had the smallest share, only 3%. As in the case of area, this is due to much higher total prices. The lowest average price per m2 was recorded for five-room flats – PLN 10 055.87.

TABLE 2. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM DEPENDING ON THE NUMBER OF ROOMS

Number of rooms	Share of transactions	Average price per sqm
1	10.23%	12 551.38 PLN
2	39.18%	11 336.26 PLN
3	35.96%	10 279.85 PLN
4	11.99%	10 062.61 PLN
5	2.34%	10 055.87 PLN
6	0.29%	11 186.01 PLN

source: own elaboration based on AMRON database

GRAPH 2. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM DEPENDING ON THE NUMBER OF ROOMS

source: own elaboration based on AMRON database

The number of transactions and the average price were also analysed according to the location of the dwelling on each storey in the building. The market was dominated by transactions of flats located on lower storeys (1 – 4) – they accounted for 69.4% of the sample. The largest number of transactions were for dwellings located on the second and third storey (transactions accounted for 18.66% and 19.25% of the total sample) – buyers were more likely to buy flats on these storeys than on the ground floor (with a 14.63% share). This may be related to the commercial premises increasingly located on the ground floor, the greater sense of security and privacy and the greater distance from noise (car noise, playground etc.) on the upper floors. There is also a noticeable downward trend in terms of the number of transactions by storey – the higher the storey, the less interest from buyers. The smallest number of transactions was recorded for premises located on the 10th storey (1.34%). There is a correlation between the average price per square metre and the storey of the apartment – as the storey increases, the average price per square metre increases. The most expensive dwellings turned out to be those located on storeys 9, 6 and 7 (PLN 12 474.50, PLN 11 649.64 and PLN 11 467.15).

TABLE 3. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM DEPENDING ON THE LOCATION OF THE DWELLING ON THE STOREY

Storey of dwelling	Share of transactions	Average price per sqm
1	14.63%	9 361.24 PLN
2	18.66%	10 230.14 PLN
3	19.25%	10 701.27 PLN
4	16.87%	11 109.98 PLN
5	11.79%	11 372.82 PLN
6	6.87%	11 649.64 PLN
7	4.48%	11 467.15 PLN
8	3.88%	11 435.41 PLN
9	2.24%	12 474.50 PLN
10	1.34%	9 804.57 PLN

source: own elaboration based on AMRON database

GRAPH 3. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM DEPENDING ON THE LOCATION OF THE DWELLING ON THE STOREY

source: own elaboration based on AMRON database

The correlation between the number of transactions and the average price per square metre and the number of storeys in the building was also assessed. The analysis was made according to the classification of buildings in accordance with the Regulation of the Minister of Infrastructure on technical conditions to be met by buildings and their location. Graph 4 shows the dominance of medium-high buildings – almost half (48.83%) of all transactions in the sample concerned dwellings located in this type of building. Low-rise buildings came second with a 28.51% share. At the end were buildings with at least 10 storeys -22.66% of transactions. The dominance of mid-rise buildings may have to do with rising land prices, which makes developers decide to construct buildings higher than four storeys in order to make more profit. Low-rise buildings are popular mainly because consumers associate them with the intimate nature of the neighbourhood and quietness. Considering the average price per sqm, the highest price was recorded for flats in mid-rise buildings – PLN 11 269.40, which far exceeded the average price for flats in low-rise buildings – the difference was PLN 1 723.67. The average price per sqm for premises in high-rise buildings in 2021 was comparable to those in medium-high buildings and amounted to PLN 11 085.69.

TABLE 4. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM DEPENDING ON THE NUMBER OF STOREYS IN THE BUILDING

Category	Number of storeys	Share of transactions	Average price per sqm
Low-rise	Up to 4	28.51%	9 545.73 PLN
Mid-rise	4 – 9	48.83%	11 269.40 PLN
High–rise	10 – 18	22.66%	11 085.69 PLN

Source: own elaboration based on AMRON database

GRAPH 4. SHARE OF TRANSACTIONS AND AVERAGE PRICE PER SQM DEPENDING ON THE NUMBER OF STOREYS IN THE BUILDING

source: own elaboration based on AMRON database

Karol Kacprzak
Maintenance and Development Specialist

The installation of photovoltaic modules has been especially popular in recent years. The common use of this type of energy generation is mainly influenced by the idea of saving money by using renewable energies, which is also supported by subsidies, e. g. from the “My Energy” programme. Solar radiation can be converted into electrical energy or used for water heating. However, the optimal use of photovoltaic modules requires a sufficient amount of solar energy, and unfortunately the location of the house and the weather conditions might not be conducive to energy generation. The answer to these doubts is a solar potential map.

On its last session, on June 8 this year, Monetary Policy Council (NBP) took the subsequent decision to raise interest rates. As experts expected, NBP reference rate was increased by 75 basis points. This was a response to dynamically growing inflation, accelerating from month to month. According to the data of the Central Statistical Office, consumer price index increased in May 2022 by 13.9% compared to the same month last year. What is worse, it is difficult to expect any change in this trend in the near future. Previously observed pro-inflation factors (post-COVID recovery of the economy, increase in energy prices, monetary policy) are presently intensified by the new ones, related to the Russian aggression on Ukraine, including in particular further inflation impulses related to the prices of energy resources and the blockade of food exports from Ukraine. Additionally, the government seems to be erratic and not determined in its fight against inflation, implementing measures that are inconsistent with the activities and measures implemented by the NBP. As a result, we can expect further increases in inflation and consequently also in interest rates. So far, the NBP reference rate has increased by 5.90% from the level recorded in October 2021. However, with a high degree of probability it can be assumed that it was not the last increase of the rate and its target level is difficult to predict. Meanwhile, during the period of low interest rates, i.e. from May 2020 to September 2021, banks granted approx. 340 000 new loans for housing purposes, the vast majority of which were of course loans with a variable interest rate based on the WIBOR ratio. The social scale of the problem can therefore be significant. The increase in repayments of a mortgage in the amount of PLN 300 thousand, taken for 25 years due to the increase in interest rates reached the level of approximately 50% of the instalment paid by the borrower in October, and for the growing number of households, the burdens related to the loan repayments have already exceed the level of 50% of income (a reminder: Polish Financial Supervision Authority (KNF) in Recommendation S indicated the acceptable level of DStI at 40% for borrowers with lower income and 50% for those with higher income).

Borrowers in a difficult financial situation already have available a number of solutions offering support, such as Borrower Support Fund, credit holidays introduced in connection with the coronavirus pandemic, possibility of annexing a loan agreement – switching to a loan with a fixed interest rate, change of the loan period and others. However, due to the difficult situation related to the dynamic increase in the amount of loan instalments, the government presented a new draft solution: the act on crowdfunding for business ventures and assistance to borrowers.

The new bill provides for changes in two main areas. Firstly, it introduces amendments to the Act of March 23, 2017 on mortgage loans and supervision over mortgage brokers and agents (Journal of Laws of 2020, item 1027, as amended) in scope of activities related to the loan restructuring process. The change assumes so-called instalment-free periods, i.e. possibility of temporarily suspending repayment of a mortgage loan, taken out to meet the borrower’s housing needs. The time horizon of the proposed solution covers the period until the end of 2023, and the right to suspend mortgage payments is to be available for two months per quarter in the period from July 1, 2022 to December 31, 2022 and for one month per quarter in the period from January 1, 2023 to December 31, 2023. Suspension of repayments will apply to both the principal and interest parts of the loan instalment, however, during the suspension periods, the borrower will be required to pay fees for insurance related to the loan agreement. This solution will be addressed only to those borrowers, who have incurred liabilities in Polish zlotys. Importantly, if the borrower takes advantage of this solution, all the terms provided for in the loan agreement will be automatically extended. Applications for instalment-free periods can be submitted both in paper and electronic form.

Secondly, the project assumes replacing WIBOR with alternative measure of mortgage interest rates. In draft author’s opinion, the WIBOR ratios are too high, what naturally results in high interest rates on mortgage loans. It is therefore necessary to replace them with a different base rate. According to the draft act, KNF is to initiate the process of determining the new index. If a satisfactory solution cannot be found, a new base rate may become the POLONIA reference rate. POLONIA is a percentage rate determining the average interest rate on unsecured one-day interbank deposits, set by the National Bank of Poland. Transition to the new index is planned to take place from the beginning of 2023.

The draft also provides for increasing the amount of the Borrowers Support Fund to PLN 2 billion (by PLN 1.4 billion) and introducing the possibility of wider use of those funds. It also formally repeals the provisions on instalment-free periods introduced in connection with the COVID-19 epidemic and clarifies the definition of a housing loan by indicating the purpose of such loan, which must be satisfying the borrower’s housing needs, as well as by defining circumstances than exclude the possibility of obtaining the support.

The proposed idea of ​​ instalment-free periods proved successful in case of the support programmes launched during the COVID-19 pandemic. A total number of 210 000 mortgage borrowers have benefited from a solution similar to the proposed one. According to the assumptions of the act, the value of support for the new solution is to reach PLN 4 billion, which is estimated to reduce costs related to mortgage loans repayments by 1/3 in the period of 2022-2023. However, it should be emphasized that this solution brings a temporary relief in monthly burdens at the price of a possible (even significant) increase in the total amount of the liability. Changing the benchmark for mortgage interest rates may occur even more illusory support. The level of the POLONIA rate is currently lower than the level of the WIBOR3M and 6M ratios by approx. 1.5%, so the benefit for the borrowers when changing the interest rate indicator could be measurable. However, as historical data shows, there is no guarantee that this difference will persist. It should also be remembered that the dynamics of the POLONIA rate’s growth in recent months clearly corresponded to the dynamics of interest rate increases, so the conversion will not stop further increases in interest rates in the event of further increases in base rates. Last but not least, the rate itself will remain only one element of interest rates on loans.

Jerzy Ptaszyński
Research and Market Service Director

The installation of photovoltaic modules has been especially popular in recent years. The common use of this type of energy generation is mainly influenced by the idea of saving money by using renewable energies, which is also supported by subsidies, e. g. from the “My Energy” programme. Solar radiation can be converted into electrical energy or used for water heating. However, the optimal use of photovoltaic modules requires a sufficient amount of solar energy, and unfortunately the location of the house and the weather conditions might not be conducive to energy generation. The answer to these doubts is a solar potential map.

Fundamentals of solar potential mapping

The solar potential map was created by geodesy engineers and enables to check the amount of energy that can be extracted from the roof surfaces. It is based on the Digital Surface Model (DSM) and meteorological data, including insolation analyses. Digital Surface Model is a point-by-point representation of the land surface with objects that occur on that area, i.e. buildings, trees and other infrastructure elements. DSM is created by LIDAR laser scanning (Light Detection and Ranging) during Airborne Laser Scanning (ALS). LIDAR transmits the laser light to the target and measures its reflection. The spot at which the beam bounced off the object is the point. The scanned object is represented by a cloud of points with specific coordinates, which can be further edited and modelled. Poland is fully covered with ALS data of varying point densities – from 4 points/m2 in rural areas to 20 points/m2 in urban areas.

PICTURE 1. WARSAW CENTER – CLOUD OF POINTS

source: mapy.geoportal.gov.pl

In addition to the Digital Surface Model, meteorological data, including insolation and shadow analyses, are required to create a map of solar potential. Although the data on solar insolation dates back several years, they do not include all the relevant information affecting the efficiency of the use of photovoltaic modules. However, an important information for mapping solar potential is sunshine duration and insolation.

Sunshine duration is the time in which radiation coming directly from the solar disk enters a certain place in a certain period. In Poland, the annual solar radiation is between 1 390 and 1 900 hours (source: PVGIS). Insolation is the amount of solar energy that falls on a certain surface at a certain time. In Poland, the average insolation is between 1 100 and 1 300 kWh/m2/year (source: PVGIS).

In addition, variable angles of incidence of the sun’s rays (solar motion), scattering of light through the atmosphere, inclination of roof surfaces, building structures, adjacent objects and vegetation, statistical weather conditions and altitude above sea level can be taken into account for the calculation.

Solar potential map in Poland

The insolation of the roofs was generated with the use of above data and Digital Surface Model. The data prepared in this way are displayed on the solar potential map, which can be found on the city Geographics Information System. In Poland, this map was created for several cities, such as Warsaw, Wroclaw, Poznan, Katowice and Bydgoszcz. It contains aggregated data on the amount of energy falling on individual roof areas, eg. on an annual or monthly basis.

The solar potential map of Wroclaw, for example, shows radiation data with regard to:

• Direct Horizontal Irradiation (IDH), i.e. the proportion of radiation that has reached the Earth’s surface and passed through the atmosphere without interacting with its components such as clouds, aerosols, etc.
• Scattered Horizontal Irradiation (ISH), i.e. the amount of radiation scattered (changed direction) by contact with atmospheric components.
• Total Horizontal Irradiation (ITH), i.e. the sum of direct and scattered irradiation.

PICTURE 2. SOLAR POTENTIAL MAP OF WROCLAW

source: gis.um.wroc.pl

The solar potential map for Poznan was created in a 3D model and also contains information on the average total solar radiation for the roof area.

PICTURE 3. SOLAR POTENTIAL MAP OF POZNAN

source: http://sip.poznan.pl/model3d/#/legend

Solar potential in the world

Renewable energy sources are playing an increasingly important role in environmental protection. Their use is not only financially profitable, but also makes it easier to move away from conventional energy sources such as coal, wood or natural gas. To promote this idea, the Photovoltaic Geographical Information System (PVGIS) was developed, covering all of Europe and Africa, as well as parts of Asia and America. Among other things, this system allows the verification of the power generation potential of different photovoltaic technologies, as well as the average monthly and daily solar radiation and temperature.

Because the solar potential maps in Poland are created by using the Digital Surface Model, they contain ready-made information about the amount of energy that can be stored on roof surface. In PVGIS, the user determines whether the panels are placed on the ground or on the roof, enters data such as the inclination of the panels and the azimuth, and the system calculates the amount of solar energy.

Summary

The solar potential map shows how different the solar radiation is on roof surfaces and provides information on whether it is worthwhile to install photovoltaic modules on the roof or not. Since the maps are publicly available, everyone has the opportunity to see how much electricity may be generated from a photovoltaic system. If the radiation on the roof is very low, it should be considered whether the energy from the sun is enough to heat at least the water or not. It is possible that the location of the building and the roof construction are not favourable and that the panels will only have a decorative function.

Daria Łaskowska
Maintenance and Development SpecialistCentrum AMRON

In multi-family buildings that have been used for several decades, the consumption of primary non-renewable energy (Epis much higher than in newly constructed ones, which results from technical solutions available at the time the buildings were constructed, not providing efficient thermal insulating capacity. As a result of long lifespan, many existing buildings are in bad technical condition and require complete renovation. The excessive heat loses, caused by, among others, lack of thermal insulation, lack of tightness in the external thermal insulation system or so-called thermal bridges, i.e. places in the walls, ceilings or roof, where the heat is excessively lost, results in increased use of energy for heating the building.

CHART 1. MEDIAN OF THE VALUE OF THE ANNUAL DEMAND OF USABLE PRIMARY ENERGY (EP) INDEX FOR HOUSING BUILDINGS IN TERMS OF THE BUILDING TYPE AND THE COMPLETION YEAR [KWH/(M2 YEAR)]

source: ‘Long-term renovation strategy. Supporting the restoration of the national building stock”. Appendix to the Resolution No. 23/2022 of the Council of Ministers as of February 9, 2022

According to data published by Central Statistical Office (GUS), 39.9% of all multi-family buildings require thermo-modernisation to meet the modern energetic standards, while in case of 9.4% buildings, the thermo-modernisation is being presently conducted or is planned to be conducted in the following years, and in case of 29.9% it is not planned at all. This means that approx. 210 thousand of building are expected to be thermo-modernised. In purpose to improve the energy intensity of multi-family buildings, it is necessary to undertake measures that reduce heat loses and to exchange the outdated heat sources, which will allow to match the power of the new installations and the needs of the modernised building. In Poland, there are programmes co-financed by the National Fund for Environmental Protection and Water Management (NFOŚiGW), which enable to get subsidy for investments related to thermo-modernisation of single-family buildings, such as exchanging of old heating stoves or window frames. As far as now, most of the programmes, such as ‘Clean Air’ and ‘My heat’ were addressed exclusively to owners of single-family houses. This time, NFOŚiGW announced its plans to start a nation-wide programme for multi-family buildings, called ‘Warm Flat’. The programme is to be launched at the first half of 2022 and aims at supporting the replacement of the outdated heat sources and thermo-modernisation of the flats in multi-family buildings in purpose to improve the energy efficiency. Within the ‘Warm Flat’ programme, the high-cost activities will be supported, such as:

• dismantling the individual, ineffective heat sources powered by solid fuels (i.e. old carbon stoves) in flats and installation of gas boilers, electric heating, heat pumps or connecting flats to common effective heat source, such as district heating network;
• constructing new facilities of central heating and warm utility water;
• exchanging the door and window framing;
• installation of the effective mechanical ventilation devices.

Under the programme, the subsidy for design documentation will also be available. The initial assumptions of the programme provide two subsidy levels: the first (basic) is intended for exchange of the stove and will amount to max. PLN 13 000, while the second (extended) will include thermo-modernisation and the maximum contribution will not exceed PLN 26 000. The subsidy amounts are calculated for one housing unit in a multi-family building. However, the exact amounts will be known after the programme is started, as it will depend on the final NFOŚiGW’s budget dedicated to the programme. At the first stage, subsidies will be available for owners of flats in multi-family buildings. The next stage is assumed to support housing communities in scope of thermo-modernisation.

The co-financed thermo-modernisation activities are aimed at decrease in value of non-renewable energy (EP) index and therefore – improvement in heating standard of the building. Research shows that the average EP ratio for the building before the thermo-modernisation was equal to 226.49 kWh/(m2 year) and after the thermo-modernisation is diminished by 37.3%, to the level of 142.1 kWh/(m2 year).

TABLE 1. THE AVERAGE VALUES OF THE EP RATIOS IN THERMO-MODERNIZED BUILDINGS IN 2010 – 2016 BEFORE AND AFTER THE THERMO-MODERNISATION AND ACHIEVED SAVING

	THE AVERAGE EP RATIO VALUE [kWh/(m2 year)]	ACHIEVED SAVINGS (%)
	BEFORE THERMO-MODERNISATION	AFTER THERMO-MODERNISATION
Poland – 2010	250.3	156.0	37.67
Poland – 2011	242.9	152.4	37.25
Poland – 2012	224.0	141.1	37.02
Poland – 2013	218.3	146.3	32.97
Poland – 2014	217.7	136.7	37.20
Poland – 2015	217.5	129.6	40.42
Poland – 2016	214.7	132.6	38.22

source: Development of the methodology and conduction of a survey of the scale of thermo-modernisation of multi-family buildings in purpose to improve the energy intensity, and assessment of needs and planned actions in that scope, Central Statistical Office

The additional benefit of the thermo-modernisation will be decrease in heating costs (by 15.87%) and savings on energy used for providing the warm utility water (by 3.85%).

CHART 2. CHANGES IN OPERATING COSTS OF THE BUILDINGS RELATED TO ENERGY USE

source: Central Statistical Office

In 2021, a pilot project ‘Warm Flat’ was started by NFOŚiGW and it was intended to elaborate its final shape and to assess the financial needs for subsidized investments. The pilot project was launched in three locations:

• in the Voivodeship of Lower Silesia, with the budget amounting to PLN 10 million;
• in the Voivodeship of Pomerania, with the budget amounting to PLN 20 million;
• in Pszczyna, a town in Silesian voyvodeship, with the budget amounting to PLN 6 million.

The greatest interest was observed in Pomeranian voyvodeship – only until the end of November, 792 applications were submitted there for the total amount of PLN 11 380 746. In Lower Silesia voyvodeship, there were 409 applications for the total amount of PLN 8 184 915, while in the most polluted municipality in Poland, which is Pszczyna, there were only 19 applications for subsidies amounting in total for PLN 168 636. At present, the submitted applications are being assessed and pilot project’s experiences will constitute the basis for the detailed nation-wide programme. The ‘Warm Flat’ programme will be executed by the NFOŚiGW with participation of the regional Funds for Environmental Protection and Water Management, which are planned to be responsible for admissions of particular municipalities. Municipalities, after receiving the subsidy, will collect the applications from the citizens.

Irena Kruczek-Sidło
AMRON System Coordinator

Aerial photography is an innovative form of object representation and serves many areas of the economy, including the construction sector. Aerial photographs are commonly used to present investments at various stages. Photos taken by satellites, as well as unmanned aerial vehicles – drones, are used to create an orthophotomap. Orthophotomap created in the process of transformation aerial photos is invaluable in the real estate industry, for construction investments, planning and site inventory.

What is an orthophotomap?

Orthophotomap is a raster image of terrain surface in orthogonal projection (perpendicular to the photographed plane), identified with a classical map, presented in an appropriate mapping. It is created as a result of processing and superimposing hundreds of satellite or aerial images, including images taken by drones. Orthophotos are used in many areas of the economy. The most popular examples of use of such maps are freely available map services, such as Google Earth or Geoportal. In Poland, the orthophotomap database is maintained by the Main Geodesist of Poland, under the Act amending the Geodetic and Cartographic Law.

An example of an orthophotomap – all of Poland and a part of Warsaw.

Source: www.mapy.geoportal.gov.pl

Why does is matter how a property looks in an aerial photo?

Orthophotomap is widely used by local governments and administration. In several cities in Poland orthophotomap is effectively used for calculating property tax payments. In this case orthophotomap, satellite images are analysed by artificial intelligence algorithms. Algorithms recognize buildings and structures and calculate their supposed area. The results are compared with other data collected by local governments. In result, it is possible to identify new buildings, extensions to existing facilities or business activity. They make it possible to identify changes in the area and height of buildings, as well as the condition of buildings. As a result, it is possible to detect the unauthorized building – illegally constructed, undeclared or erroneously reported buildings, which contributes to higher income for the cities.

The use of orthophotomap and aerial photographs

Digital maps, photos and orthophotomap are used on many stages of a construction project: from presentation and planning to inventory, promotion and sales. Orthophotomap has therefore a wide range of application also in the construction industry. It is used for monitoring and imaging particular stages of construction, road or railroad investments. It is helpful in planning an investment location and its influence on the environment. It can be helpful in creating investment offers. It make it possible to regulate planning fees and rationally plan the project costs. Photos often complement project and investment documentation.

Orthophotomap obtained from aerial photos can be successfully used also for land use planning and municipal management. By comparing images from different periods, it is easy to control and plan tree felling. It is also possible to identify wild dumps, as well as water and ground pollution. Orthophotomap is used when drawing up spatial development conditions studies, land development conditions or local spatial development plans. On the basis of the pictures it is possible to determine the purpose and actual use of the land. The photos may be crucial in classifying a plot of land as construction or agricultural.

Aerial photos allow to assess the state of the natural environment, including planning of various types of investments and their impact on the environment. This is often the case of public purpose investment areas with large impact on the environment and forest management. Such analyses enable to estimate the scope of work and minimize the costs. Orthophotomap as well as aerial photos taken by a drone are used for estimating real estate prices, as they enable to determine the actual state of the property. It is also useful during land and building registration. Aerial photos are used in many sectors of the economy for the inventory of land with large areas, pits and open-pit mines.

Drones in the construction sector

New technologies are gaining popularity in all sectors of the economy, including real estate and construction. We don’t need to carry out complicated analyses to know that real estate sales offers, which include aerial photos, are more attractive to potential buyers and in result properties are being sold faster than those, which do not have such photos in their advertisements. Modern marketing solutions enable a buyer to see the property and the surrounding area from a completely different perspective. The photo may encourage to seek for details of the ad. For a person interested in buying a real estate its surroundings are very important. It is much easier to show them in an aerial photo. Photos or video recorded by a drone complement the sales offer. This increases its attractiveness and shows the advantages of the location.

Aerial photography has evolved in recent years and the use of drones has become quite common. Better and better cameras and unmanned aerial vehicles enable to take more and more accurate pictures. The availability and prices of these devices make them accessible to anyone. With the use of drones, aerial photos and videos are taken and photogrammetric data is collected to prepare orthophotomaps. The use of drones in the construction industry enables the monitoring of ongoing construction work, verification of project implementation, as well as safety control during work at heights.

Summary

The application of new technologies, including drones, to improve the implementation of investments, for administrative purposes and on real estate market is becoming increasingly common. However, it should not be forgotten that even the best technologies require control and supervision of a person with appropriate knowledge, skills and experience. The tool itself is often not enough to achieve the intended results. Using a drone requires obtaining appropriate authorizations. It is important to know the appropriate programs and algorithms. The development of orthophotomap is specialized task. Considering the ubiquity of new technological solutions, it is not surprising that illegal buildings, illegal tree cutting or business activities will be brought to light sooner or later.

Małgorzata Kwiatkowska
Maintenance and Development Junior Specialist