The tallest apartment building in the European Union located in the heart of Warsaw is an icon of luxury and the most prestigious address in Poland – ZŁOTA 44 delights, inspires and surprises, once again breaking the sales record despite the turmoil on the capital market during the pandemic. The third quarter of 2020 ZŁOTA 44 closes with increases both in the number of transactions and their value in the first three quarters (2020 vs 2019). What is the reason for success despite the market opposition?
Luxury still resists the crisis
The second quarter of 2020 and the global lockdown, which was not related to the business cycle or economic factors, caused a drastic contraction of world economies, including the Polish one.
“The second quarter is behind us. The world has been “flooded” with money. Globally, this is $16 trillion to save economies and it seems that they are starting to recover from these gigantic resources. All this makes the optimism return,” says Marek Zuber, economist, financial market analyst, expert and financial advisor.
Due to numerous aid packages, interest rate cuts, loans to entrepreneurs aimed at limiting the effects of the crisis, the recovery in the third quarter was faster than expected, and in recent weeks we have seen an improvement in economic growth forecasts. The Citi Group research forecasting GDP for 2020 showed that the expected decline would reach a level of 5 percent in Poland. In the amendment to this year’s budget act, the economic situation looks better than expected – the government assumed a 4.6 percent decline in Polish GDP.
Currently, the predictions of government representatives are even more optimistic. It is said that the decline in GDP this year maybe even less than 3.5 percent.
The first half of 2020 showed that luxury real estate maintained a steady demand and ZŁOTA 44, as the flagship representative of this segment, recorded best sales in the first half of 2020. At that time, the success of the first quarter of 2020 had a direct impact on the high number of closed transactions and their value. The second quarter, more difficult due to the freezing of the economy, caused a temporary stagnation. Despite this, the transactions at ZŁOTA 44 were being still finalized. In the third quarter, sales returned to an even faster dynamics, thanks to which the total number of transactions from January to September 2020 increased by 50 percent and the value of transactions for three quarters increased by 82 percent – compared to 2019. ZŁOTA 44 ended the third quarter with 100 percent increase in the value of transactions vs the third quarter of 2019.
Experts’ predictions assuming a large share of luxury real estate in the range of investments of Polish entrepreneurs and the selection of larger apartment areas are correct.
Why is it worth investing in luxury?
“Regulations and taxes in Poland are more favourable than in Western Europe. Poland offers stability and is devoid of unrest as we know it from the USA. It can be considered a place of safe investments, especially in the luxury real estate segment. The sale at ZŁOTA 44 shows that this security is taken into account when diversifying the portfolio. Investing in luxury real estate can also be a vaccine against inflation. Investors know that the number of planned luxury investments is clearly falling and it takes several years to complete them. Then the prices of new properties will be much higher. So, it’s still a good time to invest in luxury,” says Michał Skotnicki, President of the Management Board of ZŁOTA 44, President of the Management Board of BBI Development SA.
The economic situation largely contributed to the 82% increase in the sales value of luxury apartments at ZŁOTA 44 vs the same period of the first three quarters of last year. Spectacular transactions such as the sale of a three-level penthouse at the top of an apartment building or the investment purchase of three apartments by a footballer, Kuba Blaszczykowski, confirmed the high attractiveness of the luxury segment for investors.
The new reality has also imposed a new model of work, business or recreation, which means that a significant increase in the sale of apartments with large surfaces that allow for a comfortable arrangement is noticeable.
“We are noticing an increase in interest in larger apartments. The trend of remote work will continue for longer. The residents of ZŁOTA 44 are mainly entrepreneurs for whom business space is extremely important. The apartment with a large area and convenient layout allow for comfortable arrangement of a workspace that will not interfere with family life,” says Christopher Zeuner, Head of Europe Amstar.