Customers do not believe in price drops. And how do developers calculate?

Here are the conclusions from the latest edition of the Developer Sentiment Index.

• 77% of developers expect current price levels to be maintained.

• The percentage of developer companies predicting price drops increased by almost 2 percent.

• Almost 1/3 of respondents expect sales to increase.

• Only 16% of customers predict a decline in housing prices.

Holidays are a time of less activity in developers’ offices

This is a study conducted by the analysis department of the Tabelaofert.pl portal on a sample of over 200 development companies throughout Poland. As the August index reading shows, the group of developers expecting price drops has been growing consistently for four months now. However, it should be noted that this percentage is only 9.9%. However, as Robert Chojnacki, the founder of the Tabelaofert.pl portal, emphasizes, “these drops may take the form of periodic discounts on selected types of apartments, of which there have been more and more on offer recently.”

With regard to the sales rate change indicator, the conclusions are less clear and the situation is more complex.

– Holiday months are often a period of lower traffic in sales offices. That is why the indicator improved in August, returning to a level above 0 and reaching 0.14 points – analyses the situation Katarzyna Tworska, Managing Director of REDNET 24. – Developers are simply optimistic about the coming months, counting on customers returning from their holidays and their greater activity on the market.

Few people believe in the “Start-up Loan”

Therefore, the percentage of developers who expect sales to increase has increased to almost 29% and is the highest in four months.

Paradoxically, the factor supporting the sale may be the turmoil related to the housing program. If we are to believe the government’s subsequent declarations, the project is to be submitted for the first discussions next Wednesday.

– Currently, probably no one expects the introduction of a new program – says Ewa Palus, Chief Analyst at REDNET Property Group. – Especially considering the fact that the legislative process is going and the risk that if the program is launched, it will be even more complicated and limited to a narrow group of recipients. Some people do not want to wait any longer and are returning to their plans to buy real estate, taking advantage of the still wide offer and the still common discounts and promotions.

The current pricing and sales policy of developers also indicates that they have lost faith in its implementation. Which in practice means that the program or announcements of its introduction no longer have a real impact on the market. Developers therefore seem to be organizing themselves in a situation of sales at current levels and will plan new projects in relation to these levels.

Customers do not believe in falling real estate prices

Customers still do not believe in price drops. Compared to the previous month, the percentage of those predicting such a development is at a similar level and amounts to 84%. The largest group of respondents (47%) believe that the current price level is stable and should be maintained in the next quarter. Although the second largest group of customers convinced of price increases is growing (from 33% to 37% monthly).

– The data from the Customer Expectations Index show that the larger the premises a customer is interested in, the more confident he or she is about the possibility of price drops – comments Jacek Matuszko, Sales Director at REDNET 24.