Polish housing construction rebound should accelerate: ING

The Polish housing construction rebound should accelerate in 2024, with new measures expected to stimulate an already solid rebound in the mortgage market, says ING Bank. The number of dwellings under construction has been gradually improving since the bottom in summer 2023.

In a reversal of the situation seen for most of last year, prospects for categories related to infrastructure investment, particularly for civil engineering construction, look less optimistic. Projects financed from the old EU budget have almost been completed. By contrast, investments co-financed from the National Recovery and Resilience Plan will start with a delay. Launching projects from the new EU budget is also set to take time, the bank points out.

In December, overall Polish construction activity rose 14% on-year, with civil engineering works rising 19%. ING attributes this to slightly warmer weather versus December 2022, and the finalisation of investments with EU funds before the end of the accounting period of the previous EU perspective. Also contributing were further residential construction improvements amid the government’s low-cost loan programme, and a low December 2022 base.

In full-year 2023, Polish construction output rose 5% on-year, driven by an 11% growth in civil engineering, while building construction dropped 1.3% and specialised works rose 3%, according to Statistics Poland (GUS) data.

Residential unit construction starts fell 6% last year to 189,093, while issued residential construction permits and applications received dropped 19% to 241,097 units.

CMC said earlier this month that supply-side adjustments and the impact of increasing levels of residential and infrastructure construction should drive sequential improvements in financial results beginning in the spring construction season (see Kallanish passim).

Adam Smith Poland