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Construction Market Slowdown Causes Building Materials Prices to Sink

REAL ESTATEConstruction Market Slowdown Causes Building Materials Prices to Sink

Orders for Polish wood are falling in foreign markets, making the raw material cheaper for Polish consumers. If someone is planning to build a house or do a renovation, it is likely the best time since the COVID-19 pandemic to make such a decision, real estate market experts argue.

Less demand for wood from abroad. A big drop in prices in the markets

Statistics presented by Polish Building Depots confirm experts of the real estate market. The drop in prices is noticeable especially in the case of wood, building chemicals, and products derived from these raw materials. Thermal insulation or roofing prices have stabilized, while in 2021 building depots and wholesalers were creating queues of eager customers for these products.

“There are several factors contributing to this situation. Currently fewer developer investments are being made, and independent residents often decided not to build in 2022 and wait for a better moment. The lack of demand for building materials, especially wood-derived ones, meant that the price reduction was hard to avoid” says Mirosław Król, a real estate market expert. “It’s hard to say how long such a trend can continue. We definitely see that programmes like “Safe loan 2%” boosted the housing market for ready-made apartments, which could also have affected the fewer decisions to build a house”, adds the expert.

The drop in prices of building materials is particularly noticeable when we compare current prices to those of 2020-2021, when prices were soaring, and people building and renovating were queuing up for windows, roof tiles, bricks or cement.

“We can say that a bubble has burst in the case of construction material prices. Some building depots are still selling off stocks that were stored during the pandemic times” says Król.

Time for renovation? Varnishes, paints and adhesives still expensive. “Finishing” yet without correction

How are the prices of building materials shaped then? The biggest price drops are noticeable in the case of wood. More than last year we can pay for glues, paints, varnishes, some chemical products. We also pay more for wallpapers, which is the result of an increase in prices in the pulp market.

“We can say that even if the prices of building materials in some segments are rising, these are usually products used for finishing, not for building the foundations of a house. Besides, these increases are just a few percent, even less than the current inflation. Therefore, the construction market, both from a developer and material point of view, is still experiencing a slowdown. Less is being built, so the prices of materials must undergo a current correction. It’s a good time to start building a house or for property renovations”, says Mirosław Król.

There is also an increasing availability of construction experts. As Mirosław Król states, for the first time in many months Polish development companies are receiving proposals from Polish workers who carried out orders for, for example, German or Danish investors.

“There is less work in these countries. Some are thinking about returning to Poland” admits the expert.

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