The average price dynamics of construction materials in September declined year-on-year to a negative -0.6%, while the price decline was 0.9% in relation to the previous month. Thus, a correction has set in on the domestic building materials market, according to experts at RynekPierwotny.pl. According to them, however, it is difficult to expect a long-term downward trend in price lists.
“Counting from the peak of the material price spike from last year’s April-May peak of average price dynamics at 34%, for several months we have been observing a very dynamic descent of the rate growth parameter, up to the negative value reached last month. Until recently, such a scenario seemed virtually impossible in an environment of record inflation for years. Meanwhile, the dovish demand for construction materials, which has been cooling for months, has done its part. The latest reading of building materials price dynamics by the PSB Handel Group stood out in September not so much as an acceleration of the deceleration of rises, but in an increasing number of cases an increase in the rate of declines. Cement-lime continues to lead the table alone as the item with the strongest year-on-year increase of 21%. The next positive indicators are already in single digits, but mostly only slightly above zero, it reported.
As RynekPierwotny.pl note, there is a growing number of items with a negative price change index, i.e. decreasing year-on-year. In September, 12 of the 20 commodity groups monitored by the PSB Handel Group were listed with a negative rate, which translated into a below-zero average growth rate, both y/y and m/m. Prominent among them, as a month ago, were wood OSB and thermal insulation, this time with price regressions of 24% and 11%, respectively, it listed.
It appears that the fundamental cause of the situation in the domestic building materials market, which is the progressive decline in demand compared to previous years, unfortunately still does not signal the prospect of a solstice. Meanwhile, it seems inevitable already in the foreseeable future. Since the beginning of the summer, housing construction statistics, which have a fundamental impact on the prosperity of the construction materials market, have been slowly climbing. For the time being, this can be seen mainly in the data of new developer investments, which may soon be joined by individual investors, they reported.
Justification for such calculations can be found in the numbers showing the popularity of the preferential loan program – “2% safe credit” – which already, according to experts, “beats the most optimistic forecasts.” By the end of the year, the number of applications for loans with government subsidies is likely to exceed 100,000, which may significantly affect the level of housing investment already in the coming months. On top of this, the initiated cycle of interest rate cuts has already set in motion the process of stimulating the residential commercial loan market, they further reported.
In turn, the results of the parliamentary elections seem to bring closer the long-awaited moment when Poland will receive funds from the National Reconstruction Plan (NRP), which will trigger on a nationwide scale local government investments, today frozen or postponed due to lack of funds, they added.
Meanwhile, stock market investors have an increasingly positive view of the prospects for the domestic construction industry. The WIG-Construction index has gained 20% in the past two weeks alone, and the outcome of the parliamentary elections has only reinforced the upward trend of construction companies listed on the WSE. What translation the anticipated growing demand for construction services should have on the market for construction materials hardly needs to be explained to anyone. In this situation, it is quite difficult to expect a long-term downward trend in the prices of construction materials. Under these market circumstances, those planning to build a house should keep their hand on the pulse so as not to miss the most convenient moment to buy them, which seems to be rather closer than further away, RynekPierwotny.pl concluded.
Source: RynekPierwotny.pl and ISBnews
