The start of 2022 will welcome us with rising housing maintenance costs. in the markets. Oh, everything is more expensive. Electricity and gas prices are on the rise, along with inflation and ever-rising prices on store shelves. All these factors contribute to the increase in the cost of housing maintenance. Experts predict that the government’s efforts in the form of an anti-inflation shield, as well as the Polish system, will not limit price increases.
The new year will welcome us with a series of increases
The first point in the list of increases is electricity. Some communities have to calculate increases of up to 100%. Many communities have contracted free-market electricity prices, and so far we have very favorable rates. It was oscillating around 300 PLN per megawatt-hour. From next year it will be more than PLN 600. All equipment, lighting and elevators in common areas will lead to higher costs.
Gas prices are the same. Compared to last year’s prices, this is a nearly threefold increase. Apartment owners will feel this increase when they settle their consumption for the first time, that is, at the end of the year, and the next consumers at the end of June.
The issue of additional business and services that offshore companies provide to societies is similar. Cleaning companies and building maintenance companies are already making proposals for a wage increase. It is a scale of 5 to 15%. For our part, we are trying to optimize these costs.
We try to define the scope of work, negotiate with companies, and suggest that they take some increments. However, I would like to remind you that in the past year we had a similar situation and in many cases it will not be possible to repeat this procedure.
If we combine all these elements, the increase will be significant. Of course, it depends on the region, the size of the city or the community. However, we must prepare our wallets for an increase of 10%. Depending on the community, rates may fluctuate in both directions.
As for the communities we cooperate with, for some we are still contracting prices for two years until the end of 2022. In these cases, the community price increase You won’t feel it until 2023.
An important point when it comes to expenses is the replenishment fund. Here, too, we have to account for the increments for two reasons. For the pressures of first wages and rising labor costs, at the moment we have a lot of work and projects started, unfortunately there is a shortage of staff, hence the need for higher offers. The second aspect is the rise in prices for building materials, which, as we all know, are becoming more and more expensive. We have items that are two or three times more expensive, but there are also items in which increases reach 5-10%, depending on the material. In conclusion, we will pay more in each aspect. As a property management company, we have tried to include some contracts that we intend to implement next year so that the contractor can purchase materials at lower prices before the wholesalers update their price lists. Such situations show whether the manager approaches his work responsibly, or whether he can anticipate the development of events. Any sane manager in creating a budget for a condominium association will have some margin of error. So far, we have assumed that expenses can be increased by 10%, and for now we will include a larger buffer in the decisions, and we will increase it to 20%.
The last point that contributes to the high cost of housing is garbage collection. This is a topic that comes back almost every year and will be no different in 2022. In the case of Warsaw, by the end of this year, the settlements will be based on water consumption. Until now, we had situations in which the owners of some buildings paid 400-500 PLN per month. From January, the system will be changed and those places that have paid the most will feel better. On the other hand, building owners who live alone may pay a little more.
Inflation also undoubtedly affects the cost of apartment maintenance. The proposals of the government in the form of a shield against inflation are maximally directed to the poorest people, who feel any changes and strongly increase. The shield wouldn’t make those people feel overwhelmed any less. In addition, Polish governance and related tax changes is one of the arguments made by companies that give us proposals to increase wages.
Mariusz Łubiński, President of Admus, which deals with property management
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