New residential construction continued to decline in the third quarter of 2009, although at a slower pace, according to data released by the Czech Statistical Office (?SÚ).
In the third quarter, construction of new homes and apartments in the Czech Republic fell by 5.7 percent year on year to 11,234 dwellings, ?SÚ said. Although a decline, the result is an improvement compared to the second quarter year-on-year drop of 21.2 percent.
Construction starts for new family houses, which represented 5,291 dwellings, registered a decline of nearly a fifth compared to the third quarter in 2008. Separately, 8,720 dwellings were completed in the third quarter, a year-on-year decline of 8.8 percent.
The total value of new construction orders was down by more than a quarter compared to Q3 2008, statisticians said. Banks continue in their careful approach towards lending money for new projects to builders, Václav Matyáš, president of the Czech Association of Building Entrepreneurs (SPS), told the Czech News Agency (?TK). There are no signs that access to loans will improve in the foreseeable future. “The decreases will certainly not stop and will continue,” Matyáš told ?TK.
New apartment construction has been on the decline for more than a year already. Experts had anticipated a drop in demand for new housing regardless of the economic downturn following years of sharp increase. Demand for new housing boomed ahead of the anticipated increase in value-added tax (VAT) rate on construction works as of 2008. Some industry representatives have pointed out that new home prices, which have declined over the past year, will start growing again as the 9 percent VAT rate is expected to increase to 10 percent as of 2010.
The planning and building control authorities granted 9.6 percent less building permits compared to Q3 2008, according to statisticians. Analysts said earlier this month that the construction sector is improving, though primarily driven by large civil engineering orders. Komer?ní banka analysts expect the construction sector to decrease by 5 percent in 2009.
