Last GUS data on housing construction in Poland brought particularly bad news. In August construction work began in total, only about 12.9 thousand. apartments. This is 46.1 percent. less than a year ago. What is the key, among those 12.9 thousand apartments, about 7.5 thousand are single constructions, and only about 5.2 thousand. they are apartments intended for sale (eg development). In this segment alone, the year-over-year drop reaches 63%.
In housing construction, it is very likely that projects already started are nearing completion and companies are trying to meet the still existing demand for apartments. The collapse of new investments shows, however, their concerns about future demand, incl. in the face of a sharp rise in interest rates
– Comment from ING analysts Bank Śląski.
Therefore, it’s still not bad when it comes to the number of completed builds. In August, a total of approximately 18.4 thousand square meters were commissioned. apartments, ie “only” less than 1 percent. less than a year ago. In the whole January-August period, we also have a jump of 1.8 percent. – compared to the same period a year ago. In the first eight months of the year, approximately 145.5 thousand square meters were commissioned. apartments.
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PKO BP Chief Economist: There has never been such a steep decline
Real estate market indicators suggest cooling is on its way: The number of new building permits and projects started has plummeted over the past two months. This is the consequence of higher interest rates, expensive materials and worsening consumer sentiment
– PKO Bank Polski economists point on Twitter. And their boss – Piotr Bujak, chief economist at PKO BP – adds:
There has never been such a strong weakening of the supply side of the housing market. This could limit negative price pressure in the short term, as well as reduce availability and raise house prices in the long run (with a stronger economy and lower rates).
A prediction similar to Bujak’s is presented by Bartosz Turek, chief analyst at HRE Investments. He notes that, taking into account the fact that the statistical construction of a residential block in Poland takes two years, it can be predicted that by 2024 developers will put far fewer apartments into use.
This is a disturbing prospect as the forecasts or announcements available today show that as early as 2023 the economic situation in Poland will improve and the declining dynamics of inflation will also begin to be accompanied by falls in interest rates. This means that access to loans will improve, so the demand for housing should also grow
– predicts the Turk. This is a definite recipe for lower availability and even higher house prices.
Why is the number of construction projects started decreasing so much?
Bartosz Turek of HRE Investments points to several reasons for the collapse in data on the number of new builds.
The most important is simply a huge slump in housing demand – many people can’t afford it now loan accommodations. Data from the Credit Information Bureau indicates that fewer than 12,4,000 people applied for a home loan in August 2022. potential borrowers. That’s over 70 percent. less than a year ago (about 42.5 thousand). These are the worst data in the history of BIK analysis.
For the first time in the history of the company, we are in a situation where we do not want to start new investments due to the bad situation of the customers.
– in early September, the board of directors of the development company Lokum Deweloper indicated, when he informed of the suspension of the planned investments. Other companies make similar decisions.
As Bartosz Turek of HRE Investments notes, the fewer projects started is also a result of the developers themselves having trouble getting a construction loan.
Among other reasons to suspend the decision to start construction work, Turek also reports the sharp increases in the prices of building materials and costs it works, as well as the fact that from July 1st this year. A change to the developer law has come into effect. It imposed additional costs and obligations on developers, including the need to make contributions to the Development Guarantee Fund.
So if a developer had planned to start selling apartments this year, they had a reason to move the start of the project from the second half of the year to the first.
– believes the chief analyst of HRE Investments.
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Kaczyński will not be happy
The vision of a much smaller number of construction sites will certainly not please the president of PiS, Jarosław Kaczyński. Especially in recent months he has raided the developers, accusing them of participating in the deal.
Kaczyński was also not satisfied that in 2021 the number of completed apartments and construction projects started was the highest after the transformation (and the number of completed apartments in 2022 – about 235 thousand, of which about 142 thousand under development. – can still exceed last year’s result). The PiS president still remembers that the statistics are worse than the end of Edward Gierek’s rule.
These apartments are larger and better furnished today, but it is a pity that we are unable to continue to achieve what we could do under communism. But there are powerful interests behind this
– Kaczyński said a few weeks ago in Stalowa Wola.
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