The construction industry is always a weathervane in any economy, and a downturn in the property market always impacts other industries such as furniture or kitchen appliances.
In July of this year, the number of new properties being constructed in Poland was 8,400, the smallest figure since the Covid-19 crisis slammed the industry in May 2020. The construction industry had bounced back quickly and strongly from the pandemic, and the last two years have been marked by a property boom.
The decisive factor in the downturn today is the rising cost of mortgages, which has hampered demand. It is a market for buyers with cash, and those dwindling numbers of potential buyers who can get credit are now often opting for smaller properties.
Until July, developers were not reducing construction markedly, but July’s figures indicate that Poland may be entering a serious downturn. The market is cooling rapidly, and developers are reacting by slowing down the rate of construction, which should slow down the current price slump.
However, that will be little consolation to workers in the sector, including construction workers, architects, and interior designers.
The downturn should mean a boom in the rental market, as those who cannot afford to buy will be forced to rent.
One thing is certain. The boom in the property market in Poland looks to be ending.