Press Releases 1998

[Index]

EAST, WEST, HOME'S BEST

UN/ECE assesses the housing sector in Poland

7 September 1998

In Poland, investment in housing is sharply down. Housing starts, for instance, dropped from 150,000 in 1989 to 59,000 in 1996, as the State is no longer involved in new housing construction, but neither the local authorities nor the private sector have taken up the slack. In 1980, the Polish construction industry built six new homes for every 1000 inhabitants; by 1996 that figure had dwindled to 1.5 (see table). These are some of the findings just published by the United Nations Economic Commission for Europe (UN/ECE) in Country Profiles on the Housing Sector, Poland (Sales No. E.98.II.E.7), the second in a series of country reports which examine the trends in the housing sector in countries in transition and put forward recommendations.

The UN/ECE report pinpoints the lack of efficient financing instruments and the inability of the municipalities to handle their new responsibilities for the provision of housing as the main causes of the stagnation in the housing sector. Several factors hinder the emergence of financial instruments: the high cost of credit; the commitment of the State to previous subsidy policies, thus limiting State funding for new, market-oriented initiatives; and the absence of a competitive mortgage banking system.

The quality of the existing housing stock is also a problem. Poland=s housing stock is relatively new -- 40 per cent was built after 1970 -- but in poor physical condition. It is estimated that some 800,000 units should be demolished and that another 500,000 to 600,000 need major renovation.

The UN/ECE report warns that, unless Poland addresses the stagnation in the housing sector, its housing shortage will worsen and labour mobility will be constrained.

Despite these warnings, there have been many positive developments, too. Housing has again moved up the political agenda and Poland is putting in place a new legal framework for housing development. The changes in the construction industry illustrate the swift transition of the Polish economy to a market system. In 1995, more that 85 per cent of all construction was carried out by the private sector, which employed 82 per cent of the sector=s total workforce (see table). After the turbulent period of disintegration of large State-owned construction firms, a vibrant private sector is now emerging in consultancy services on legal, economic, architectural, design and construction issues.

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Construction of dwellings

	Poland		Western Europe
	Annual increase	Per 1000 inhabitants	Per 1000 inhabitants
1980	217 090	6.07	4.3-8.1
1990	134 215	3.52	3.5-6.6
1994	76 080	1.97	-
1996	59 000	1.50	-

Sources: Central Statistical Office, Housing in 1996 (Warsaw, 1997). Central Statistical Office, Statistical Yearbook 1981 (Warsaw, 1982). European Commission, Statistics on Housing in the European Community (Brussels, 1993).

Investment in housing

(as a percentage of total investment)

Country	1980	1991	1992	1993	1996
Bulgaria	13	8.7	6.6	-	-
Hungary	-	22.3	-	14.8	-
Poland	20.8	27.8	22.2	16.2	10.5
Romania	9.3	10.1a	-	5.9	-

Sources: Economic Commission for Europe, Annual Bulletin of Housing and Building Statistics for Europe and North America, 1996. Data supplied by the Housing Research Institute.

^a 1990.

Share of private sector in construction output and employment in Poland

Private sector	1990	1991	1992	1993	1994	1995	1996
Constructionutput	33.8	37.5	78.7	84.5	86.5	87.9	88
Employment in construction	36.3	51.1	70.8	71.1	76.8	81.5	82

Source: Data supplied by the Housing Research Institute.