construction Slumps in Polish Regions, Signaling Uneven Growth and Potential Price Increases
WARSAW, Poland – A growing number of regions across Poland are experiencing a near-total halt in new residential construction, a trend experts warn could exacerbate existing disparities in living standards and ultimately drive up housing costs nationwide. The “developer white spots” – areas where building permits and construction starts are dramatically declining – are largely former voivodeship cities struggling to compete with larger urban centers,according to recent analysis.
Data reveals a notable slowdown in building activity across the country. In the first half of 2023, developers received permits for approximately 75,800 apartments and houses, a steep drop from the 102,100 permits issued during the same period in 2022. This decline extends to both permits and actual construction starts.
“The absence of developers is a clear signal that the area is not very attractive for settlement,” notes Andrzej Prajsnar, an expert with the RynekPierwotny.pl portal.
The stagnation is attributed to a confluence of factors,including the differing development rates between former and current voivodeship cities,the pull of job opportunities and higher wages in major metropolitan areas,and the overall regional differences in living standards.
Despite a still-relatively-high overall supply of apartments, the pace of growth is slowing considerably. Tomasz Kaleta, managing director for sales and marketing at Develia, predicts this will “limit the offer and increase pressure on prices” in the long term. He doesn’t foresee price drops, stating, “due to high construction costs, land shortage and long administrative procedures, we do not expect a drop in apartment prices. A more likely scenario is stabilization with a tendency to gradual growth, especially in large cities and attractive locations.” Develia forecasts moderate growth of 1-2% above inflation.
The trend is also fueling consolidation within the development industry, with investment activity increasingly concentrated around the largest urban centers. Joanna Chojecka, sales and marketing director for Warsaw and Wrocław in the Robyg Group, points to increasing development costs, limited land availability in major cities, regulatory uncertainty, and investor caution due to high interest rates and demographic shifts as contributing factors.
Witold Kikolski, member of the management board of MS Waryński Development SA, adds that new supply will become “more selective,” with “the best locations” and projects catering to genuine buyer needs taking priority.
Sources: RynekPierwotny.pl, Dompress.pl.
