Without coal, oil and gas. How war in Ukraine affected the construction of real estate in the world
What is the situation in the real estate market today and what trends will outweigh in the near future? The consequences of the war had a negative impact on the global economy, which gradually recovered after the Covid-19 pandemic, and slowed down this process at least in the near future. Construction, which is one of the important sectors of the economy, was no exception. According to GlobalData consulting company, the world construction sector has increased by only 0. 6% last year.
The only exception is China, where the industry increased by 5. 5% in 2022. With the beginning of a full -scale invasion, the participants of the global construction market have encountered the problem of reconstruction of logistics routes and the rapid increase in the cost of energy. Problem with supply chains. In the process of implementation of construction projects, an important role is played by the adjustment of logistics processes.
In case of their failure, the construction schedule is delayed and costs increase. It was these market participants who have observed the beginning of the pandemic. With the invasion of Russia into Ukraine, supply chains have undergone new pressure. Due to the destruction of enterprises and closed ports, the import of ferrous metallurgy products (cast iron, steel, etc. ) from Ukraine was substantially limited.
For their part, international sanctions imposed on Russia and Belarus reflected on the reduction of imports of a large number of products and accordingly created the need for their replacement. For example, in 2018, 60% of cast iron came from Russia and Ukraine. In 2022, the Russian goods were replaced mainly by imports from Brazil (which amounted to more than 2 million tons) and Ukraine (about 698 thousand tons).
Yes, the restoration of supply from Ukraine was due to access to the Polish ports in the Baltic Sea. Increasing the value of energy resources. The construction industry requires considerable energy at all stages. Increasing energy prices influenced the cost of raw materials, transportation of materials, production of construction products, construction and operation of real estate objects. For example, steel, PVC pipes (or polyvinyl chloride), bricks, etc.
require considerable energy during their manufacture. Considering this aspect, in 2022, both the reduction of industries and the complete stop of a number of steel plants in Europe were completely stopped. As a result, the above challenges have become a prerequisite for high inflation and the rise in prices of all goods, including construction products.
The discount rates that the US Federal Reserve and the central banks of European countries have increased in order to repay inflation have reduced the issuance of mortgage loans. Accordingly, this reduced the activity of buyers in the real estate market. In particular, in Poland, to improve the situation and stimulate the living segment, it is planned to develop a new mortgage program. The war has varying (and violating) stability in Europe and the world before its end.
At the same time, the market prevails that in the long run the war will accelerate the introduction of energy efficient methods in construction. Therefore, in a number of developed countries, the implementation of "green" investments is actively continued to weaken the impact of fossil fuel prices (coal, oil or gas). Energy efficient building materials and technologies are also widely used to help optimize energy and cost consumption. This market is estimated at $ 422 billion.
For its part, it is expected that by 2030 the global "green" building market will increase to $ 951 billion (with an annual growth of about 12%). Sustainable development orientation is determined, in addition to policy, by the demand for quality objects. In Europe, this year is predicted to reduce interest from tenants and investors in low -energy office real estate. Accordingly, real estate, which meets modern requirements, will remain a profitable option for investment.
The urgent direction is the increase in the share of investments in infrastructure projects, which are important for organizing a comfortable environment and achieving climate neutrality. In particular, these are communication networks, heating systems, ventilation, energy and water supply, road surface, etc. Plans for the modernization of infrastructure and the implementation of new facilities cover European and US countries, where investment support options are being developed.
So, today there are several large -scale infrastructure projects in Europe, the purpose of which is to expand the rail and water connection between the countries of the region. In total, the EU is intended to attract about € 300 million in infrastructure within 2027 within the appropriate strategy. The demand for infrastructure investment will increase, which is important for the implementation of "smart" cities.
In particular, modernized elements - special sensors can determine the optimal garbage collection time, control road traffic or street lighting. Undoubtedly, the war had an unprecedented impact on the Ukrainian real estate sector and remains one of the important factors that affects the state and development of the global market.