Landowners often assume that a plot's price is driven by its size and location. In reality, two plots of the same size in the same district can differ in value several times over. A developer does not buy square metres of land – it buys the ability to build and sell a certain number of apartments. Below we describe the seven factors that determine how much it is prepared to pay.
How a developer calculates land value
The starting point is the residual method. The developer estimates the revenue from selling the apartments that can be built on the plot and deducts the costs of construction, design, financing and sales, as well as its expected margin. What remains sets the maximum price for the land. That is why, in the market for multifamily development land in Poland, prices are often expressed not in zlotys per square metre of the plot, but in zlotys per square metre of PUM – the usable floor area of apartments that can be built.
1. Planning status
This is the first question every developer asks. Is the plot covered by a local zoning plan (MPZP), and if so, what use and parameters does it allow? If there is no plan, is there a final zoning decision (decyzja o warunkach zabudowy, WZ), and what type of development does it cover? For a developer, a plot with neither a plan nor a WZ is an investment burdened with risk and a long time horizon, which directly lowers the price. With municipal land-use studies expiring in 2026, the importance of this factor will grow further.
2. Buildable capacity – how much PUM can be built
On the basis of the plan or WZ, the developer calculates the usable floor area of apartments that can be delivered. This depends on, among other things, development intensity, maximum height, building footprint, the share of biologically active area, building lines and the required number of parking spaces. A small change to one parameter – e.g. permitted height increased by one storey – can change the value of a plot by tens of per cent.
3. Access to a public road and utilities
The plot must have access to a public road – directly or through an established easement. Equally important is the availability of networks: water, sewerage, electricity and district heating or gas. The developer checks not only whether networks are nearby, but whether they have enough capacity for several hundred apartments. The need to build a connection, a transformer station or to rebuild a junction are costs that will be deducted from the land price.
4. Legal title
The developer analyses the land and mortgage register (księga wieczysta) and the property documents: mortgages, easements, limited property rights, third-party claims, co-ownership, and the plot's status in the land register. Another important question is whether the land is agricultural property within the meaning of the Act on shaping the agricultural system – in which case the purchase may require the consent of the National Agricultural Support Centre (KOWR). Every ambiguity lengthens the transaction and increases the risk that the developer will factor into the price.
5. Ground and environmental conditions
Geotechnical surveys show whether the ground allows an underground car park to be built without costly protection works. The developer also checks the groundwater level, possible soil contamination (especially on brownfield sites), the presence of trees that require a felling permit and the plot's location relative to protected areas and flood zones.
6. Constraints: noise, heritage protection, zones
The value of a plot is affected by constraints that are not always visible at first glance: heritage protection and archaeological sites, restricted-use zones around airports and busy roads, high-voltage lines or nuisance facilities nearby. In Kraków, with its historic fabric and extensive protection system, the heritage analysis is often one of the key elements of the assessment.
7. Location from a market perspective
The developer assesses location through the eyes of an apartment buyer: access to public transport, travel time to the centre, schools, services, green space, the surroundings and competing supply in the area. Since mid-2025, thanks to the obligation on developers to publish prices, prices in neighbouring projects are public – making it easier for both the developer and the seller to verify assumptions.
How to prepare a plot for sale
Transaction experience shows that the highest prices are achieved by plots whose owners, before going to market:
- know the plot's potential – they have a preliminary capacity analysis and know how much PUM can be built,
- have put the legal title in order – the land and mortgage register, road access and any easements are settled,
- have collected the basic documents – an extract from the plan or the WZ decision, a map, information on utilities,
- reach the right buyers – developers for whom the plot matches their investment profile, not random enquirers,
- run a competitive process – talks with several developers at the same time, on comparable terms.
Frequently asked questions
How do you value a plot for multifamily housing?
The residual method is most commonly used: the costs of the project and the developer's margin are deducted from the revenue from selling the apartments that can be built. The key is a correct estimate of the plot's buildable capacity, i.e. PUM.
What is PUM?
PUM (powierzchnia użytkowa mieszkań) is the usable floor area of apartments that can be built on a plot within the parameters of the local zoning plan or zoning decision. In the Polish market for multifamily development land, prices are often expressed in zlotys per square metre of PUM.
Is a plot without a local zoning plan worth less?
Usually yes, because the developer has to factor in the risk and time needed to obtain development rights. The value of such a plot depends on its planning prospects – an existing WZ, the provisions of the land-use study and, in future, the general plan.