How to read residential – the glossary

The residential market in Poland is rapidly developing.  Data and trends related to the market are often the subject of research, analyses and comments – from research companies, independent experts and media alike. It is not uncommon that the multitude and ambiguity of the terms with which this data is described lead to difficulties in the interpretation of data or even discrepancies in their presentation. In the JLL Residential Team (before: REAS), both in consultancy projects conducted upon the request of our clients, and in our regular market reports, we use data that we have been collecting for almost twenty years and which are described according to our in-house methodology. This methodology involves not only research procedures, but also the method of collecting and processing data, and specific terminology.

Please find below the basic set of terms used by JLL experts when we speak or write about the Polish residential market.

Primary market monitoring

JLL's market monitoring is a periodical study of the primary residential market (standard-wise: quarterly). The monitoring is conducted by a team of trained employees, who are responsible for gathering information on all residential projects which are conducted in a particular city or area. In order to find new projects which are emerging in the market, we follow trade publications, advertisements and websites. We also attend industry fairs. Our local advisors are also an important source of information. We also use and process data provided by cooperating development companies.

The data is collected in standardised, computer-assisted telephone interviews with developers' sales offices ("the mystery client approach"). In the case of incomplete or conflicting information, JLL employees or local consultants personally visit sales offices and ongoing constructions, after which another telephone interview is conducted. The data concerning each building is collected periodically and has a consistent form, creating a structured database of current and historical data.

Development project

Alternatively: a development, project or, in the development context, an investment. A development project is a long-term, risk-bearing allocation of economic resources (capital expenditure) which is intended to generate a return for the developer. In generic terms, a development project is a result of combining three components provided by the developer: vision, location and capital, which are necessary preconditions for any development.

Development venture

A term defined in the The Act on the Protection of Rights of Buyers of Residential Units and Single-Family Houses of 16 September 2011—popularly known as the “Developers Act” (Dziennik Ustaw of 2011, no. 232, item 1377). It is a process as a result of which a homebuyer acquires:

• the right of separate ownership of a flat; or
• the right of ownership of a property consisting of a plot of land and a single-family house, or the right of perpetual usufruct for a plot of land and ownership of a single-family house on this plot of land being a separate property.

The process entails – the construction (i.e. executing a building in a specific location, as well as reconstruction, extension, floor addition) and factual and legal actions necessary for commencing and completing the building, in particular:

• acquisition of rights to the property on which the building is to be constructed;
• preparation or acquisition of the building design;
• purchase of building materials; and
• obtaining necessary administrative authorisations required by separate regulations.

Phase (project stage)

A separate part of a development project. According to the JLL Residential Team's terminology, a separate phase/stage of a residential development project is determined by important characteristics which define the status of the development, such as the status of construction (planned, under construction, completed, on-hold), the status of the selling process, date of sales /construction launch, date of sales/construction completion. The term development phase is not synonymous with the term building (block of flats). A phase may consist of one or many buildings. Every time a developer defines a group of buildings with different characteristics (e.g. different dates when construction is launched) as one phase/stage in their marketing materials, JLL's researchers will register this in the database and monitor each of these buildings as a separate phase of the development. This "unbundling" allows us, for instance, to track actual sales rates for individual parts of multi-phased developments.

Construction status

According to JLL's terminology, dwellings (residential projects) can be attributed to one of three construction statuses: planned; under construction; completed;

• planned – units or developments whose construction has not been started yet; a project is assigned to the "planned" category based on, at the very least, a declaration of the developer that they intend to carry out a development project on a particular plot of land,
• under construction – units or developments whose construction is in progress, i.e. the developer has released the plot/construction site to the general contractor (only in the case that the constructor is not part of the developer), and construction works are in progress,
• completed – units or developments whose construction is completed, i.e. the general contractor has completed all construction works and released the building to the developer.

Sales status

Dwellings (residential projects) can be attributed to one of four sales statuses: sold, on offer, planned, and on-hold.

• sold – units or developments which are no longer on offer (sold or at least reserved with payment), and whose sales have not been put on-hold. Under specific circumstances (e.g. package sales), the "sold" status can also be attributed to units (developments) which have previously had the status "on-hold" and which have never been attained "on offer" status. This is typical for investment purchases, where there has been no exposure of units offered to the market;
• planned– units or developments which have not been released for sale yet, but which the developer has announced the planned completion date;
• on offer – units or developments which were launched for sale, and which are on offer (i.e. available for sale) in the market;
• on-hold – units or developments which are no longer on offer that previously had the " on offer" status but which the developer has decided to withdraw from sales transactions. If the developer decides to change the function of the project (e.g. to an office project) or cancels the project altogether, the project is attributed the "closed" status.

Units launched for sale

These are dwellings/units or developments whose sale was launched in the analysed period (usually a quarter). In practice, launching a project for sale happens when sales offices begin to accept paid reservations (the minimum requirement). Launching for sale or releasing to the market involves a change of the sales status in the database from "planned" to "on offer". It does not necessarily involve the start of construction. According to JLL's methodology, launching for sale can occur only once. Any temporary suspension and then resumption of sales (of the entire project/phase or a part of the units in the project/phase) does not result in re-recording these particular units in the number of units launched for sale, it only affects the number of units on offer at a particular time (see: Units on offer).

Units on offer (the offer)

Alternatively: dwellings on offer. These are the units in various stages of construction, available for purchase at the time of the study. The number of units on offer is usually calculated at the end of the quarter. The number of units on offer does not include units planned to be launched for sale, sold or on-hold (withdrawn from the market). An increase in the number of units on offer can result either from a surplus of units, launched for sale over units sold in a given quarter, or from relaunching of units that: (1) had previously been withdrawn from being sold by the developer; (2) had been included in the units sold based on paid reservations or development contracts which were eventually terminated (returns).

Returns

Flats that return to the developer's offer because buyers have withdrawn from purchasing them - even if they have previously concluded a reservation agreement or developer contract and paid the necessary amount.

Unsold completed units

This term refers to units available for purchase in projects/phases whose construction has been completed (construction status: completed; sales status: on offer).

The average price of units on offer

This is the average price of all units on offer at the time of the study (e.g. average price of units on offer at the end of Q4 2019).

The average price of units launched for sale

It is the average price of all units whose sales have been launched in the period under consideration (e.g. average price of units launched for sale in Q4 2019).

The average price of units sold

This is the average price of all units which were sold (explained in: sales status) in the period under consideration. It should be noted that the average price of units sold refers to the asking price before final negotiations and does not refer to the transaction price. In the majority of cases, the final transaction price is slightly lower.

Quality segments of the market

In JLL's analyses, units in multifamily housing fall into two primary segments: flats [Polish: mieszkania] and apartments [Polish: apartamenty]. Whether a project/phase is qualified as an apartment segment is decided by location and qualitative criteria, with regard to the units, the building as well as the entire development. The price is an auxiliary criterion in this segment. However, no unit is excluded from the apartment segment on the basis of size, as is the case with other analysts.

Quality segments are further discussed in the article How to recognise upper-middle and high-end apartments.

Supply

The term is most often used in our supply-demand charts and depicts the number of units launched for sale.

Demand

The term represents the number of units sold in the periods when sales volumes are lower than the number of units launched for sale. In the periods when supply is lower than demand, it illustrates the number of units sold which is supplemented by an estimate of unmet demand.

Sell-out period

A theoretical/analytical indicator calculated as a quotient of the number of units on offer and the average quarterly number of units sold, expressed as a number of quarters necessary to sell all the units on offer, assuming that the sales volumes of the four preceding quarters are upheld.

Sales intensity

A theoretical/analytical indicator calculated as a quotient of the quarterly net sales volume (quarterly gross sales volume minus units returned to the offer in the quarter) and the number of units on offer at the beginning of the quarter, expressed as a percentage.

INCA

Investment Catalogue (abr. INCA) is our in-house database of residential development projects by developers, cooperatives and other investors, accrued through monitoring studies (primary market research studies) which are conducted by JLL's monitoring team.

Didn’t find a particular term or explanation? Ask our experts.