Built to suit
Independent construction is becoming an increasingly popular alternative for potential homebuyers who find the ever-growing price of domestic real estate to be more than they can manage. In an effort to reduce the cost of financing a new home, many Poles are becoming their own developers, eliminating the middlemen, and thereby slashing costs by between 30 and 50 percent.
An old, new trend
Independent home building is not new to the Polish market. According to data from the Central Statisical Office (GUS), over the past 20 years it has typically comprised about 50 percent of the housing construction market. In 2003, the number of such homes more than doubled, from 52,433 in 2002 to more than 118,000 units, accounting for over 70 percent of all homes built that year. It was around that year that local and international development companies became active in Poland and prices began rising swiftly.
Today, with home prices already exorbitant in comparison to average salary levels, even people with comparatively high incomes are building their own homes. In H1 2007, 30,000 permits were issued for independent home construction, accounting for half of all home-construction permits issued during that period.
"The market has recently seen a sharp rise with regard to interest in the individual construction of homes, as opposed to purchasing a finished property from a developer," said Emil Szweda, an analyst with Open Finance. "For middle-class Poles, this is above all an escape from very expensive home prices in the city, along with a new, healthier lifestyle in the suburbs." A recent analysis of the independent home-construction market in Poland by Open Finance suggests that home owners can save an average of between zł.200,000 and 300,000 by taking on the construction of a new home themselves.
Do-it-yourself with help
While some people choose to contract out various phases of construction to different firms, acting as a project manager of sorts, established firms like Bien-Zenker and Światowe Inwestycje offer comprehensive home-building services that cover all phases of construction, including project design, legal and administrative paperwork, permit securing, basic construction and finishing. These companies are also equipped to assist clients in plot acquisition upon request. The whole process of building a home takes from 12-18 months, from start to finish, with actual construction typically lasting between six to eight months.
"There is certainly a greater interest in our company's services because of the high prices of developers' homes," said Piotr Śmietanko, president of Bien-Zenker. "A number of people are coming to realize that purchasing their own plot and contracting out the construction of a home themselves is a more reasonable option," agreed Marcin Górnikiewicz, vice president of Światowe Inwestycje, Atlas International's representative branch in Poland.
Homes are based on a catalog of tried-and-true blueprints from architects either employed by or closely affiliated with the company. In certain cases, clients can adjust these designs to their own needs or even bring their own projects to the table, although Śmietanko remarked that such situations are rare, as most people prefer to opt for a ready-made project. Any modifications carry added costs and must undergo analysis by the company's own design team to ensure that the project meets safety and feasibility guidelines. Still, at the competitive prices offered by Bien-Zenker and Światowe Inwestycje, some people find they can afford to allow themselves a dash of opulence, like outfitting their new homes with marble.
According to Śmietanko, price-per-sqm for a home delivered according to a developer's standard is in the range of zł.3,000. A 150-sqm home would cost around zł.450,000 to build - a considerable savings for home buyers, considering that developers charge as much as zł.1.2 million for a similar home in non-central districts of Warsaw such as Wesoła or suburbs like Józefosław.
Home prices throughout the rest of Poland are swiftly catching up to those in the capital, making independent home-building a nationwide trend. Last year in Kraków and Łódź, for example, prices spiked almost 70 percent. "While Mazowieckie voivodship is the most popular area for independent construction - particularly in the greater Warsaw area - the trend is spreading to other big cities," said Śmietanko.
Governmental aid?
The government has recognized the need to simplify procedures associated with smaller-scale home construction. The most recent initiative is attempting to make construction-friendly changes to several key laws. An amendment to an act on the protection of agricultural and forest territories, for example, would free up farmland in more densely populated areas across the country.
"The 'de-agriculturalization' of all land in areas withover 100,000 inhabitants, along with all Class IV, V and VI land, will end the requirement for administrative approval within the local zoning plans," explained Christian Schnell, a partner at legal firm BSJP. The measure would provide new areas for development, lifting the land crunch and lowering pressure on prices.
According to Schnell, the initiative also calls for substantial changes to construction law, which would absolve investors from having to apply for a construction permit for residential buildings of up to 12 m in height and 5,000 sqm in net area. "In this case, it would only be necessary to report the construction and submit a project design from an accredited architect, along with the necessary opinions and analyses," he said.
While the project's backers in the Sejm had said it could be implemented at the start of 2008, for now it has been put on hold. One reason is that local governments are indignant over their reduced role in determining the scope of development in their own jurisdictions. Disfunction in national politics has also contributed. With land as scarce as ever and prices soaring, however, the need for viable alternatives to expensive developed properties will continue to grow.
