Bumper residential sales, VC bonanza and lessons from Auschwitz anniversary

The Polish residential market defies expectations with bumper Q4, Polish startups win big from 2019 VC bonanza and Polish Holocaust survivor Marian Turski captures the world’s attention with a stirring call for vigilance.
Micro Bite: Residential sales defy market expectations with bumper Q4 – reports JLL 

A strong fourth quarter in Poland’s six largest metropolitan areas helped to push the annual total of residential sales to 65,400 units for 2019, amounting to the second-best result in history, according to JLL’s report ‘Residential Market in Poland Q4 2019’. The sale of 17,600 units in the last quarter in Warsaw, Kraków, Wrocław, the Tri-City, Poznań and Łódź represented a 9% increase on the previous quarter.

Poznań recorded the highest YoY increase by bettering the 2018 results by 30%, while developers in Warsaw enjoyed the highest quarterly growth with a 22% increase from Q3 to Q4. The markets in Łódź (3% YoY) and Wrocław (2% YoY) also grew steadily. The second-largest market of Kraków continued to regress with a 12% YoY decrease and the Tri-City managed to sell 8200 units, which was 2000 less than the record set in 2017.

The national average price of 9,000 zł per square metre was nearly 2,000 zł more than in 2017, with Warsaw, Wrocław, the Tri-City and Łódź recording the highest increases. The rise in prices had prompted many analysts to predict a drop in demand, but it appears that a surge in supply in the last quarter and the steady growth of purchasing power among Polish consumers may have cushioned the market. 

“The abrupt increase in supply in the last quarter of the year met with a positive response from demand despite constantly rising prices,” said Katarzyna Kuniewicz, Head of Residential Research, JLL. “Everything therefore indicates that it is not prices that inhibited sales, but not enough choices for buyers to meet their expectations. This is also confirmed by record numbers in Poznań and Łódź, where a clear increase in supply helped achieve sales records.” 

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Macro Bite: Total VC funding for 2019 came in five-times larger than the previous record set in 2017

Last year, the Polish startup community landed a combined 1.2bn zł in VC funding, as reported by PFR Ventures, a sub-fund of the state-owned Polish Development Fund (Polski Fundusz Rozwoju: PFR) that facilitates funding for Polish SMEs. 

In their annual report compiled with the venture capital fund, Inovo Venture Partners, a total of 270 transactions were registered and yet just three startups accounted for nearly half of the total figure. The medical appointment website DocPlanner received 344m zł in funding, while Brainly (an educational technology company) and Booksy (an online booking platform for beauty services) raised 120m zł and 115m zł respectively. 

The VCs behind each of these three major projects are based abroad. It is no surprise then that international funds and VCs contributed the majority (54%) of the total transaction value, which was spread over just 12 transactions, suggesting only a select crop of Polish startups are catching the international eye. The majority of international investment came from the USA, Denmark, the UK and France.

On the other hand, over 80% (225) of the projects were generated from public capital in the form of smaller investments made by the National Centre for Research and Development and PFR Ventures, combining to account for 27% of the total transaction value. The domestic private sector made up the rest (19%) over 31 transactions.

As a share of GDP, the total value of VC investments increased from 0.006% in 2018 to 0.048%, falling just shy of the EU average in 2018 of 0.049%.

Side Bite: “Do not be indifferent”: Marian Turski, Polish Holocaust survivor at the 75th anniversary of the liberation of Auschwitz. 
Far right: Marian Turski on a bench in the Lodz ghetto during WW2.

Nearly 200 Holocaust survivers and delegates from more than 50 countries gathered at the Auschwitz-Birkenau Memorial on Monday to commemorate the 75th anniversary of the liberation of the former Nazi German concentration and extermination camp. 

“The magnitude of the crime perpetrated in this place is terrifying, but we must not look away from it and we must never forget it,” said President Andrzej Duda. 

Four Auschwitz survivors shared their personal stories during the ceremony, one of them being 93-year-old Marian Turski, who decided to attend the event to convey a touching message to the next generations. “Auschwitz did not descend from the sky,” said Turski, a former journalist and historian. He called for people not to be indifferent because “if you are indifferent, you will not even notice it when upon your own heads, and upon the heads of your descendants, another Auschwitz descends from the sky.”

“Don’t be indifferent if you see historical lies,” he continued. “Don’t be indifferent when you see that the past is drawn to current policy needs. Don’t be indifferent when any minority is discriminated against … At the 11th hour: don’t be indifferent.”

To read more about Marian Turski’s story, see the Man who stayed written by his granddaughter, Klaudia Siczek.

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Written by: Poland Today Team