Prices of building materials will fall? There are estimates

The latest report from the Central Bureau of Statistics on price changes in construction states that rates in April 2022 were higher than a month ago. Therefore, building a house in Poland is also more expensive. It is estimated that PLN 1 million may prove to be too low an amount to cover all costs. Does this mean that fewer and fewer Poles can afford to build their own homes, or will the prices of materials and labor finally begin to fall?

The current, uninteresting situation of investors building houses

Many Poles dream of owning their own single-family home on a plot in the city or beyond. Some of them borrowed from banks as part of mortgage or construction and mortgage loans to run them.

Unfortunately, the rising cost of building a home is pushing investors’ budgets to the limit or just bursting. How much does it cost to build a house? In 2022, inflation and galloping prices of materials and labor now caused the total cost of building a two-story house with an area of ​​​​about 140 square meters. it is over 800 thousand zlotys.

From this pool, more than half of the cost is bringing the house to a developing state. 25 percent take the cost of the lot, and about 22 percent. – costs of interior and garden finishing.

The costs of building a house in 2022 compared to previous years are determined by a sharp increase in material prices. Professionals also charge more for their services.

Compared to 2021, the cost of building a house has increased by more than 20%. The average price per square meter, having already taken into account the finishing, purchase of a plot, erecting a fence and landscaping, is more than PLN 5.8 thousand. PLN, and we are still dealing with here a careful calculation that only takes into account average prices.

The magnitude of the rise in building material prices

Since 2016, prices on the building materials market have been rising dynamically. However, they have been most noticeable in the past year. From March 2021 to March 2022, the most expensive products needed to build a house, such as:

  • thermal insulation – an increase of 62.8%;
  • OSB boards – 50.3 percent increase;
  • dry construction – an increase of 42.5%;
  • roofs, gutters – increase by 37.4%;
  • walls, chimneys – increase by 36.9%;
  • residential environment – an increase of 34.6%;
  • waterproofing insulations – increase by 33.3%;
  • garden – increase by 28.9%;
  • installations, heating – increase of 25.8%

Similar results are presented by the PBS Group, which tracks the prices of leading construction, home and garden materials. She estimates that prices in June 2022 compared to last year, prices rose by an average of 32 percent.

When making a cost estimate for building a house, you should take into account a larger margin for increasing the material price. The forecasts for the future, at least until the end of this year, are not very positive. Instead, one should prepare for further rate hikes. And will the prices of building materials fall next year?

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Also see: A modern log cabin overlooking the Tatra Mountains. The cost of living is surprising

When do the prices of building materials fall?

So far, virtually nothing points to a rapid decline in building material prices. Market analysts say the inflation peak is ahead of us. Almost everything is more expensive, so it makes no sense to count on the prices of materials going down quickly. Forecasts indicate that stabilization will occur earlier and at a rather high level.

The reasons for the rise in prices in construction are: high costs of purchasing raw materials needed for their production, record energy and fuel prices, as well as wage pressures on the part of workers due to the current galloping inflation. In addition, there is the war in Ukraine, which has disrupted the supply chain of many raw materials and materials.

The Polish Construction Employers’ Association predicts that the rise in raw material prices on world markets as a result of the war in Ukraine will lead to a further, virtually unstoppable rise in material prices on the Polish market. They are negatively affected by the depreciation of the zloty against the world’s major currencies, notably the US dollar and the euro.

Higher prices of individual building materials pose a serious problem for investors building houses, which also suffer from the low supply of many important products, such as mineral wool, silicate stones and polystyrene foam.

Mortgage loans and mortgage loans are more expensive, so building a home will cost more than before, and it will be more difficult for investors to get a loan that will allow them to build a home in a state they can move into. They will have to put much more of their own resources into the investment. Experts warn that nowuntil the end of 2022 and into 2023, construction investment may slow down due to the high interest rates in the country and at the same time quite high inflation.

Szymon Machniewski – expert from Extradom.pl

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