The latest information from the Central Statistical Office (GUS), presenting data on residential construction in October and ten months of this year, has announced a rather unexpected breakthrough in the correctional trend of new developer investments. This data has been on going since March of this year. The question is whether the October investment activity of developers, the highest since June 2022, means more than a random one-off surge in statistics.
In October, a positive month-to-month change was noted for all three categories of GUS data on residential construction, but only new starts of apartments, significantly influenced by new developer constructions, experienced a spectacular growth. These still are the most important from the point of view of the prospects of investment development in housing. After a half-year correction, this data has significantly rebounded in October.
In total, last month saw the construction of more than 23 thousand apartments and houses across all investment categories. This indicates a year-to-year growth by over 18 percent and over 21 percent compared to the previous month. In total, within the first ten months of the current year, almost 205 thousand apartments has been build which is 29 percent better result than in the corresponding period of the previous year.
Meanwhile, developers alone have started building nearly 133 thousand new projects since the beginning of the year, marking an impressive 44 percent growth year on year. Also, in October alone, 16 thousand apartments for sale or rent were started, which is nearly 30 percent more year on year and 35 percent month to month.
Experts from the portal RynekPierwotny.pl indicate that there is still a noticeable revival in the case of new construction permits or submissions with a construction project in GUS data. The result from October was at around 24.3 thousand permits and is both year-to-year and month-to-month better by one and a half percent and 6 percent respectively. Moreover, the result since the beginning of the year at 244 thousand is nearly a quarter better than the one achieved in the comparable period of 2023.
Meanwhile, statistics of apartments handed over for use are known to be less significant for development and evaluation of the current economic situation and continue to change almost every month at a relatively stable but lowest level in years. The total result from October was slightly over 17 thousand, which is marginally better month-to-month but worse by 17 percent year-to-year. The result from the beginning of the year at 162.5 thousand handed over apartments is more than a tenth below that achieved in the corresponding period of the previous year.
The housing construction data from GUS for October did not disappoint, and rather pleasantly surprised with a leap increase in new builds for sale or rent. Developers appeared to be cautious in starting new constructions since spring. This should strongly correlate with sales data for new apartments which for months has been decidedly lagging behind the volumes of new entries into the developer’s offer. As a result, the latter records values highest in years, not showing any desire to change its upward trend.
This situation raises the question of the point of boosting new investments by developers. The question is, whether this is the effect of expecting positive outcomes in the matter of yet another program of subsidies to housing loans, or maybe the beginning of a downward interest rate path from the start of the new year. Either way, the latest GUS data on residential construction give food for thought, perhaps predicting interesting decisions in the development of the primary housing sector in the near future.
Author: Jarosław Jędrzyński, expert of RynekPierwotny.pl portal.
Source: https://ceo.com.pl/jesienne-ozywienie-w-danych-gus-budownictwa-mieszkaniowego-36376
