At the beginning of the year, housing construction statistics from the Polish Central Statistical Office (GUS) typically reflect a seasonal slowdown in investment activity. However, in the current year, after an optimistic January in terms of construction starts, February saw a stabilization of statistical data at fairly average levels. As noted by experts from RynekPierwotny.pl, market participants will have to wait a little longer for a spring revival in the housing construction sector.
A Predictable Start to the Year
Although this January did not disappoint expectations regarding new investments, it did not indicate any major turnaround in the clearly weakening trend observed in housing construction data for most of the previous year. Rather, it suggested that these figures would remain at moderate levels in the foreseeable future, with potential for improvement if market conditions were to change favorably.
February confirmed this outlook by maintaining all three types of GUS statistics at similar month-to-month levels. In the second month of the year, construction began on a total of 16,600 apartments, nearly 20% fewer than the same period last year. Developers started construction on just under 11,000 units, representing a 23% year-on-year decline and a month-to-month drop of over 13%. According to experts at RynekPierwotny.pl, this result significantly weakens the optimistic interpretation of January’s data surge, which had initially suggested the beginning of another upward trend in housing starts.
In total, the first two months of the year saw the start of just under 34,000 housing and apartment construction projects, a few percentage points lower than the previous year’s figures. Developers alone initiated construction on more than 23,500 units, about 10% less than in the corresponding period of the previous year. This indicates a rather weakening investment climate, although the relatively high comparative base from a year ago should not be overlooked.
New Building Permits Also Losing Momentum
As for statistics on new building permits or project submissions, February confirmed the ongoing decline that has been evident for nearly a year. In the past month, GUS recorded a total of 20,000 permits, an increase of 2% compared to January, but a few percentage points lower year-on-year. The total number of building permits issued in the first two months of this year stands at approximately 40,000.
New building permits remain a relatively reliable indicator of future market demand potential from developers. February’s figure of nearly 13,400 permits was 2% higher than in January but 14% lower year-on-year. This is partly due to the high level of permits issued at the beginning of 2024, similar to the high comparative base seen in housing starts. Nonetheless, the volume of new permits obtained by developers in February is considered quite average, suggesting that the investment climate in the coming months is unlikely to see above-average growth.
Weak GUS Data vs. Stock Market Boom for Developers
Recent GUS data on housing construction shows that the number of units completed and delivered has reached its lowest level in at least five years, a trend that continued in February. A total of just under 15,000 units were completed, marking a decrease of a few percentage points both year-on-year and month-on-month. Since the beginning of the year, slightly more than 30,000 apartments have been delivered, representing a marginal 2% decline year-on-year.
The decline in these GUS statistics in February reflects a drop in developer activity, as fewer than 9,000 units were completed, a 10% year-on-year and 5% month-on-month decrease. Over the first two months of 2025, developers delivered more than 18,300 apartments, a figure almost identical to the same period last year.
According to experts at RynekPierwotny.pl, the latest GUS housing construction data clearly suggests that a revival in the domestic housing investment segment has yet to materialize this spring. Moreover, at present, it is difficult to predict whether or when such a recovery will occur in the form of a clear upturn in investment activity.
Meanwhile, a spectacular surge has taken place on the Warsaw Stock Exchange, where residential developers’ shares have soared. This has pushed the WIG-Real Estate sector index above its previous peak from May of last year, marking a breakout in the nearly 13-year-long bull market. This should theoretically signal bright prospects for the primary housing market in terms of both a potential increase in demand for new apartments and improving conditions for new investment projects.
However, it is still far too early to draw such optimistic and far-reaching conclusions. The stock market euphoria is limited to just a few major players in the residential development industry, who have managed to achieve record-breaking sales contracts despite the market slowdown. This is not enough to predict a broad-based return to a housing boom in the foreseeable future.
Author: Jarosław Jędrzyński, Expert at RynekPierwotny.pl
