For ten years in the construction industry we have been dealing with an increase in the prices of comprehensive commercial real estate investments. Over the decade, prices have risen by around 20 percent. Contrary to appearances, the coronavirus did not change the situation significantly. In March and April, the proposed cost estimates did not differ from those of the last months of last year, according to the CBRE analysis.
Cost stabilization is likely to continue, although experts point out that prices may fall slightly in the coming months. It will result, among others with fewer investments, which will force subcontractors to become more competitive.
“There are many indications that the current market situation is not significantly affecting the construction industry. Labor prices remained at the level of those from previous quarters. Due to the fact that works at construction sites are continuing all the time, contractors do not feel much fear and keep their rates at the current level,” Anna Czuchryta, Head of Cost Department, Forbis Group, said.
“We anticipate further stable increase in realization prices. Let us note that Poles' wages are increasing every year. In this regard, we aspire to Western Europe, so it is a sure process, translating into the prices of materials and labor. The current crisis has caused a temporary, dramatic drop in oil prices, but in the perspective of a return to normal economic growth, the consumption of fossil fuels in the implementation of construction investments and obtaining raw materials for the needs of the investment is very high, and their prices will also increase from year to year, as depletion of deposits,” Małgorzata Senatorska-Dobrowolska, Head of Design & Build, CBRE, added.
Based on the analysis of the situation of companies operating in the relocation industry, CBRE experts have identified several potential risks that entrepreneurs will face. It is a lack of workforce, a shift of commitments, delays in implementation and possible loss of financial liquidity.