The year 2022 brought a whole avalanche of bad news for home builders. At the same time, credit taps were turned off, and the prices of building materials and labor rose sharply. The previous years were not kind to us either. As a result, since 2018, the cost of building a house for 5 years has increased by over 76%. Against this background, what has been happening in recent months is a gentle breeze of long-awaited normalization.
In June 2018, it was possible to build one meter of a house in a developer standard for just over PLN 3.4 thousand. zloty. It’s been 5 years and today it is over PLN 6,000 per meter, according to the estimates of the website wielkobudowanie.pl. The average cost of building a square meter of a house to the developer’s standard increased during this time by over 76 percent. If that was not enough, these costs have been growing almost continuously for years. At that time, however, the increases were not as dynamic as those from 2022. Then, the average rates even skyrocketed. A recovery or a certain dose of normalization was brought only in 2023.
Materials were more expensive than labor
The biggest culprit in rising construction costs has been soaring material prices. In some cases, the price increases even exceeded 100 percent. We are talking here specifically about materials related to the facade, plasterboard construction or floors. The first one is especially noteworthy. The rates of materials used for façades have increased by 137% over the 5 years since June 2018.
The prices of materials for the construction of plumbing and central heating installations were slightly slower. In these cases, prices have increased by almost 60% in the last 5 years. At the other extreme, we have materials related to electricity, the rates of which went up by about 34 percent in the same period.
And although, in general, materials have been more expensive than labor over the last 5 years, here too we can find examples of shocking changes. Example? Rates demanded by plaster specialists. Only 5 years ago, laying a square meter of plaster by a professional cost 77 zlotys. The most current data (June 2023) suggest that it is currently PLN 165. So we have more than doubled these rates.
The services of painters and specialists in plasterboard and sewage systems also cost much more. Within 5 years, they increased their price lists by 74 percent. up to 95 percent. Example? A few years ago, we paid an average of PLN 40 for painting a square meter of a wall twice. In June 2023, it was over PLN 78. On the other hand, since June 2018, central heating specialists have raised their rates the least. The prices of their services have gone up by an average of just over 26%.
The biggest price increases are already behind us?
After such rapid increases in rates and prices, even this market has calmed down. In recent months, the dynamics of cost changes has slowed down – at least that’s what Eurostat and PSB data suggest. Based on them, we can talk about the so-called disinflation. Example? Average prices of materials in April last year increased by 34 percent. compared to the same period in 2021. In June this year, this dynamics decreased to 3.6 percent. (y/y).
We have also started to observe similar trends in the case of the services of some professionals. According to Eurostat data, the average rates for electricians, painters, carpenters and heating equipment maintenance increased by 14% over the year. (05/2022/05/2023). Just a few months ago, these values reached the level of 20 percent.