INTERVIEW Jan Demeyere, co-founder Speedwell: “There is still room for growth and huge demand in the residential market”
2022 started on a positive trend for Speedwell, but the situation in Ukraine and the turbulence in the market led to a decrease in transactions for the real estate developer compared to the beginning of the year.
“The total number of transactions is lower than in 2021, but at an acceptable level that allows us to continue our projects as planned. There are still enough customers looking for quality residential projects, and in a period with a high degree of unpredictability, investing in the purchase of an apartment is a safe investment, which many buyers turn to also to protect their accumulated financial reserves,” Jan Demeyere, co-founder Speedwell told The Diplomat-Bucharest.
How would you describe the evolution of the residential market in Romania this year?
2022 started very well from the perspective of sales, but with the situation in Ukraine and the change of some important factors in the relationship with the market (inflation, the exponential increase in construction costs, the change in credit conditions) the number of transactions decreased compared to the first months of the year, especially in the middle segment of the market. On the upper segments of the residential market, the number of transactions and the price level are satisfactory, and this gives us confidence that the residential market in Romania has the same good potential that we identified when we started this business.
How have sales of residential projects developed by Speedwell fared in 2022 (so far) compared to 2021?
As we said, the total number of transactions is lower than in 2021, but at an acceptable level that allows us to continue our projects as planned. There are still enough customers looking for quality residential projects, and in a period with a high degree of unpredictability, investing in the purchase of an apartment is a safe investment, which many buyers turn to also to protect their accumulated financial reserves.
What are Speedwell’s local market goals in 2023?
Our priorities haven’t changed much compared to what we already had in last year’s agenda.
We are consistent in our goal to build projects to high standards, to improve the quality of life of urban residents.
We focus on the development of sustainable projects, with an emphasis on TOD (Transit Oriented development) and the formation of communities. With these development principles in mind, we started working on an ESG strategy to create a necessary framework to support SPEEDWELL’s sustainability policy. Now, our main efforts are directed towards obtaining the necessary approvals for two of the projects we are developing in Bucharest: The Meadows and Griro.
Bucharest was frozen at the urban planning level. Building permits are issued, but because every project developed on a plot of land larger than 3000 square meters needs a PUZ, this translates into a bottleneck for larger projects.
The feedback we are getting from the authorities is that the PUZs are being issued and there is no delay. I challenge the authorities to provide us with the total number of PUZs granted in the last two years.
In these challenging times, we believe it is essential that industry and authorities work together as the impact will be felt at all levels, whether it is another exodus of the workforce due to the dwindling supply of suitable housing or the lack of opportunities in the construction and real estate industry.
From my point of view, urban planning must go beyond the political level and should not be used as a weapon. We urgently need a shared vision and a board that includes people from specialist universities alongside people with practical and industry experience.
This urban planning must be separated from electoral mandates. The problem we face today is that projects based on old PUZs are still being built, and new projects with a different and better approach are not approved. It is the exact opposite of what the current political leaders have promised.
If current legislation does not act now, the consequences will be disastrous. Prices are already getting higher and if the PUZ situation is not resolved, they will continue to rise.
What changes have you noticed in customer behaviour over the past year?
We cannot deny that the recent changes in construction material prices and high inflation have had an impact on buyer behaviour.
People are more reluctant when it comes to purchasing a property, in this changing economic context, and this is especially visible in the evolution of sales of mid-range projects.
The crisis caused by the war in Ukraine, the pandemic, the increase in the prices of construction materials and changes in the terms of mortgage loans have created concern among potential customers.
However, there are still many people who know that investing in real estate is one of the safest things they can do right now.
Also, a high-quality project will always make a difference and those who are looking for high standards are still part of our buyer base.
As a result, the behaviour of the customers addressed to the medium projects has changed, and the purchase decision takes longer, while for the higher and premium projects, no noticeable changes have occurred.
What are your expectations regarding the evolution of the residential sector in 2023, in this difficult economic context?
That’s a tough question and I wish I had a crystal ball that would show me the correct answers.
I can only answer based on my and Didier’s experience. We have been working in Romania for twenty years and have weathered many storms.
First, there is still room for growth and huge demand. The current energy crisis will affect many people, and the need for well-insulated, low-energy housing will increase. Given the current context, it is almost impossible for the current building stock to become carbon neutral from an economic point of view.
Financial institutions have been very careful after the financial crisis and now this is paying off. Investing in real estate is still a safe one.
We are confident that quality projects with a focus on design, sustainability and community are still sought after.
There will be a slowdown in 2023. There will be challenges ahead. Even so, we are confident that we will overcome these difficulties and emerge stronger and better from this crisis.