In 2004, construction output grew to 4.5%, but this growth was largely in the purchase of real estate and construction materials rather than in construction production.

The Polish Construction Research & Forecasting (PAB) credits this growth in construction materials to the owners cumulated repair tax relief. However, the Central Statistics Office (CSO) reports a 13% decrease in construction materials output in the 1st quarter 2005, slowed by an increase in VAT taxes that took affect in 2004.

Consequently, the CSO also reports a 33.5% decrease in individual housing construction and a 21.1% decrease in co-operative housing construction. It is important to note however, that this decrease is calculated based on the year 2003's record breaking 72.6% increase in individual housing investment. Though the reports show a decrease in 2004 and 2005, the numbers are 60% higher than 2002's statistics.

Still, the number of households in Poland is increasing faster than homes can be built. Business NewsPoland reported that the number of families in Poland exceeds the number of homes by an estimated 1.5 million. In addition, 10% of homes (approximately 1 million) currently occupied will be vacated by 2010 due to their advanced state of deterioration. The Polish government has promised to start work on enabling a more competitive construction market to be achieved, amongst other efforts, via credits subsidised by the state budget.

Sources: Euroconstruct Country Report, 59th Conference, 2005. Housing Markets, Domestic & International, Canada Mortgage and Housing Corporation (CMHC)