Will the next amendments to Poland’s Developer Act increase the transparency of residential investments and strengthen the protection of homebuyers? How does the property development sector assess the proposed changes, especially the restrictive ban on increasing the price of an apartment after a preliminary agreement has been signed? What impact could the new rules have on the housing market? These questions were addressed in a survey prepared by the real estate service dompress.pl.
Greater transparency welcomed by most developers
Most representatives of the development sector agree that measures aimed at increasing market transparency and strengthening the protection of homebuyers are, in principle, a positive direction. Developers point out that clearer information about projects, sales procedures and the financial standing of companies may help buyers make more informed decisions and increase trust in the primary housing market.
Tomasz Kaleta, Managing Director for Sales and Marketing at Develia, notes that most of the proposed amendments should be assessed positively because they are intended to improve market transparency and further professionalise the sector. In his view, expanding the DOM portal to include data on developers’ activities could make it easier for customers to make informed purchase decisions and strengthen confidence in the industry.
He also positively assesses the planned clarification of information standards regarding residential projects and the strengthening of customer protection in reservation and apartment handover procedures. According to Kaleta, such solutions may contribute to a more transparent market environment.
A similar opinion is expressed by Witold Kikolski, Management Board Member at MS Waryński Development S.A. He emphasises that building trust in the housing market is also in the interest of developers. Greater transparency in the sales process and clearer rules for returning reservation fees may positively affect buyers’ sense of security.
Grzegorz Smoliński, Management Board Member at Dom Development, also views the proposed changes positively, especially those concerning wider access to information about investments, construction standards and the situation of the developer. In his opinion, these solutions may support more conscious purchasing decisions and build greater confidence in the residential market.
Joanna Chojecka, Sales and Marketing Director for Warsaw, Wrocław and Łódź at the Robyg Group, points out that any change increasing market security and transparency is generally beneficial for customers and supports the professionalisation of the sector. In her view, the housing market should be based on clear rules and predictability.
Price indexation ban raises the most controversy
The greatest concerns among developers are related to the proposed complete ban on price indexation after the signing of an agreement. Industry representatives argue that this provision may be too restrictive and insufficiently adapted to the realities of long-term development projects.
Tomasz Kaleta from Develia points out that doubts are raised especially by situations related to the final measurement of an apartment. In practice, slight differences between the designed and completed floor area may occur, for example as a result of changes introduced at the buyer’s request during construction. According to Kaleta, such issues require clarification in order to maintain a balance between consumer protection and the practical realities of the construction process.
Witold Kikolski from MS Waryński Development notes that a complete ban on price indexation may be problematic in an environment of changing investment costs. He adds, however, that in the projects carried out by the Waryński Group so far, the company has not used price indexation clauses and has ensured unchanged financial terms for customers after signing the agreement.
Dom Development takes a more neutral position. Grzegorz Smoliński explains that the company has never used clauses allowing prices to be updated as a result of, for example, rising inflation. This approach, he says, gives customers predictability and transaction security.
A more critical assessment is presented by Zuzanna Należyta, Commercial Director at Eco Classic. She notes that this is already the seventh amendment to the Developer Act, which, in her opinion, reflects both the quality of the regulations and a negative attitude towards the industry. She argues that price indexation has been used by only a small number of companies, especially recently. At the same time, it is unclear whether a price adjustment resulting from differences in the final floor area after construction would also be treated as indexation.
Należyta points out that such adjustments may work both ways. If the completed apartment is smaller than planned, the developer returns the appropriate amount to the buyer. In her opinion, the planned provisions may create uncertainty instead of solving real problems.
Developers warn against transferring all risk to the industry
Several respondents argue that a total ban on price indexation would mean transferring the entire cost risk to developers. This may be particularly problematic because residential projects are often implemented over several years, during which the costs of materials, labour, energy and financing may change significantly.
Joanna Chojecka from Robyg stresses that developers operate in an environment of dynamically changing construction, energy, material and financing costs. In her view, completely eliminating indexation mechanisms could mean that all economic risk is borne solely by companies implementing long-term projects. She does not describe this as discrimination against the industry, but considers it a highly restrictive solution that may limit market flexibility.
Damian Tomasik, CEO of Alter Investment, also argues that the complete ban on price indexation may have the opposite effect to that intended by the legislator. In his view, developers may be forced to include larger safety buffers in prices already at the start of sales. This could translate into higher apartment prices for buyers.
According to Tomasik, some companies may also delay launching new projects until costs become more stable, in order to reduce the risk of carrying out an investment at a loss. As a result, the new regulations could lead to higher housing prices, lower supply of new projects, longer sales processes and increased financing costs.
Andrzej Swoboda, Vice-President of the Management Board at Grupa CTE, also warns against overregulation. He points out that excessive regulation may not benefit either companies or customers. It may reduce developers’ willingness to expand their activity, which in turn could affect future housing supply and prices.
Swoboda also highlights practical issues such as the settlement of minor measurement differences after construction or changes in VAT rates, which are beyond the developer’s control. In his opinion, it is difficult to regard as fully fair a solution in which the entrepreneur must bear all consequences of changes independent of them, without the possibility of properly settling the agreement.
Part of the sector sees the regulations as unnecessary or excessive
Not all developers believe that the planned changes will significantly improve buyers’ safety. Mateusz Bromboszcz, Vice-President of the Management Board at Atal, argues that current regulations already provide strong protection for buyers. He stresses that the legal environment of the development sector has changed significantly over the past several years and that today customers receive extensive information about the project and the company from which they buy an apartment, including through a detailed information prospectus.
Bromboszcz also points out that Atal, as a public company listed on the stock exchange and operating on the market for more than 35 years, already meets high standards of corporate transparency and customer service. In his view, customers perceive this as an advantage and a guarantee of reliability.
Zuzanna Należyta from Eco Classic is particularly critical of some of the proposed solutions. She argues that certain obligations duplicate information that is already provided to buyers. As an example, she mentions the standard of apartment finishing, which is already attached to the model developer agreement, while the model agreement itself is attached to the information prospectus. In her opinion, expanding the prospectus with the same information may be unnecessary.
She also questions the need to introduce regulations requiring apartment layouts to be published on developers’ websites. According to Należyta, it is difficult to find a company that does not already present such layouts online. In addition, customers already have the right to receive a prospectus with the apartment layout upon request.
Possible impact on the housing market
The planned changes may increase transparency and strengthen buyers’ sense of security, but the industry warns that the cost of this regulation may ultimately be borne by customers. Developers indicate that additional obligations, greater regulatory risk and the inability to reflect certain cost changes in contracts may lead to more cautious pricing policies.
Several market participants expect that developers will start including larger risk margins in initial apartment prices. This means that even if buyers gain greater certainty that the price will not change after signing the agreement, the starting price itself may be higher.
There is also a risk that some companies will become more cautious about launching new projects. In a market that already faces supply constraints, any additional factor limiting new investments may affect the availability of apartments.
At the same time, greater transparency may have a positive effect on trust in the primary housing market. Buyers may receive more information about the investment, the developer and the conditions of purchase, which can make the decision-making process safer and more predictable.
The sector calls for balance
The general conclusion from the statements of developers is that the industry does not oppose greater transparency or stronger customer protection. On the contrary, many companies see these goals as beneficial for the entire market. The main concern is that some of the proposed provisions, especially the complete ban on price indexation, may be too rigid and may not take into account the economic realities of long-term residential investments.
Developers argue that the key issue is to find a balance between protecting buyers and maintaining conditions that allow companies to carry out projects in a predictable and economically rational way. In their view, transparent and clearly defined indexation rules may be a better solution than a total ban.
The final shape of the amendment will therefore be important not only for developers, but also for buyers. If the regulations increase transparency without excessively raising investment risk, they may support the stability of the market. If, however, they lead to higher costs, lower supply and more cautious investment decisions, their real effect may be different from the one intended by the legislator.
