Crisis-struck

Warsaw-based residential developer Dom Development has reported a fall in its third quarter financial results. The company reported sales revenues of zł.150 million, 45 percent less than in the same period in 2007, while its profit fell by 69 percent y/y and totaled zł.20 million. The developer sold 222 apartments in the July-September period, 125 fewer than in Q3 2007.

According to Dom Development, its results reflect, for the first time, the slowdown in the Polish residential market and the recent decrease in the accessibility of mortgages, both of which have led the developer to scale back its operations. The company will continue with previously announced plans to halt land purchases and postpone the launch of some new projects.

Altogether, Dom Development plans to reduce expenses envisioned in its 2008 budget and preliminary budget for 2009, cutting approximately zł.1.5 billion in costs.

Faced with a more difficult market situation, the developer plans to concentrate on the popular apartment segment, in which demand remains strong, it claims, due in part to a substantial housing deficit in Poland. The firm also hopes to boost sales by offering apartments finished in a turnkey standard as well as by providing special mortgage programs for its clients.

"Although next year will not be easy for developers, I am sure that in the long-term perspective the Polish residential market has huge growth potential. That is why we are treating the current situation as a test for the players on the market," said Jarosław Szanajca, president of Dom Development's board.

"I am convinced that our company is very well prepared for this, due to its established market position, solid foundations and stable financial situation," he added.