As expected, the number of residential units delivered for use in H1 2010 is lower than in the analogous period of the previous year. In all probability, by the end of the year 2010, circa 130,000-140,000 residential units will have been delivered in Poland, which means that the result will remain higher from the long-term average noted in a dozen or so years. It ought to be emphasized that this indicator reflects investment decisions taken by developer companies in the years 2007-2008, and in the case of private investors – much sooner, even as early as 2004. 

The most interesting statistics regard the number of units started – in H1 2010, it reached a total of circa 81,000 residential units, i.e. more by 19,5% than in H1 2009. This alone does not seem surprising, however let us take a look at the construction output noted by specific investor categories. Private investors started over 45,000 units, mainly single-family houses. This number is almost equal to the construction output noted in H1 2009 – it seems that for private investors, business cycles in the residential market are insignificant. Still, we need to bear in mind that in this sector, the announced construction start is not necessarily followed by any building activity: if the money is scarce and the loan is not available, the construction can always be temporarily stopped.

The developers started constructing 31,500 residential units, i.e. more by 67% than in the previous year. The high construction dynamics resulted above all from the suspension of new constructions in H1 2009. However, this number reflects also the high level of optimism on the part of Polish developers, which has not been justified by the sales results.

This is good news for contractors and producers of building materials, who ought to expect plenty of orders. This situation should also suit the clients, since the offer volume is growing and there will be a lot to choose from. However, due to the fact that the scale of construction loans has not increased significantly, in order to finance project’s construction some developers will require the clients to pay by installments.

One final observation: in that period, only 28,500 units were granted building permits, which constituted circa 91% of the number of units started in the same period. Within the whole country, the number of granted building permits decreased by circa 3,000. How come? The process of issuing building permits is also periodic in its dynamics: at the moment, especially when it comes to large and complex projects, the authorities are granting building permits based on applications submitted in H1 2009, i.e. at the time of crisis. In H2, the ratio of construction starts to building permits ought to improve.

Kazimierz Kirejczyk
President of the Board

For more detailed information view GUS website

Kazimierz Kirejczyk, co-founder and president of REAS advisory company, is one of the leading Polish experts on residential market in Poland, supporting its development from the early 1990s.
REAS advisory company provides services to developers, investors and banks active in the residential market. The company is also strategic partner to Jones Lang LaSalle, the global leader in advisory services in the commercial real estate market.