The latest GUS report, publishing preliminary data on residential construction for April and the first four months of this year, did not confirm the strong recovery signal observed in March. Experts from the RynekPierwotny.pl portal note that while a spring correction in statistics is not unusual, the significant decline in momentum may be somewhat concerning.
The strong upward trend in GUS residential construction data, initiated exactly a year ago, mainly concerning new housing starts and permits, experienced a notable correction in April. The question is whether this indicates the end of the clear acceleration in the primary market’s investment cycle or just a natural pause in the ongoing trend.
In total, last month saw investors begin the construction of over 21,000 apartments, a result 46% better than April last year but nearly 10% worse month-on-month. Developers started 12,600 units, 80% more year-on-year due to a very low base, but recorded a month-on-month decrease of around 20%.
In the first four months of 2024, over 81,000 housing units were started in Poland, marking a more than 50% increase compared to the same period last year. Developers alone reported nearly 55,000 units, an 80% year-on-year increase. Despite the April setback, these results indicate a strong acceleration in the primary housing market’s investment cycle.
GUS data on new building permits or project submissions tell a similar story. In April, nearly 25,000 administrative decisions were obtained, with almost 94,000 from the beginning of the year, reflecting a 21% and 30% increase, respectively. Developer permits reached 17,000 in April and 67,000 year-to-date, showing an 18% and 37% year-on-year increase, though a 15% month-on-month decline.
Statistics on units completed and handed over remain secondary to GUS’s leading indicators. In April, just under 16,000 units were completed, a 24% year-on-year and 11% month-on-month decline. The year-to-date figure of 65,000 units is 15% lower than the same period last year.
The latest GUS report on the state of residential construction in Poland appears less optimistic than a month ago. According to experts at RynekPierwotny.pl, year-to-date results still look impressive, significantly influenced by last year’s record-low base. The sharp correction in the current data raises questions about whether it signals a more lasting slowdown in the domestic residential market’s investment activity.
The monthly data regression, while present in both main forms of residential construction, was more pronounced for units built for sale or rent. This suggests that the initial April 1 deadline for new technical conditions, ultimately postponed to August, might have significantly impacted the statistics.
Additionally, the fate of the new mortgage subsidy program, which could significantly impact the primary market’s sales outlook, remains uncertain. The lack of finalized regulations, potential introduction of price per square meter limits for eligible apartments, and ongoing debate within the ruling coalition about the program’s viability raise concerns about its immediate future prospects.
