Asked by the panel “When will the downturn in construction and property end?”, all the speakers honestly admitted that nobody knows. “But that does not mean we don’t know under what conditions it will happen,” said Roman Matys.
It would not have been right for me to judge the actions of the Polish government, so I refrained from commenting on the initiatives mentioned. My colleagues analysed their prospects well enough anyway, although their conclusions were gloomy. Yet their assessments underlined my point. Poland has around 950 towns and more than 43,000 villages. These are places where people chose to live, invested in property and will keep doing so. Their answers to the question “Why did you decide to live here?” would help a great deal in understanding how society rates the quality of life in a given place. Even better would be to ask those who decided to leave a town or the country: “Why, what didn’t work for you?” Combining the answers of these two groups would show the authorities best what needs to be done, including to stimulate the property market.
Only one thing will have a direct and decisive effect on ending the downturn: making life in a given country, town or village as comfortable as possible. As this chain of logic shows, the main engine of change is grassroots initiative that pushes for decisions at national level. I am convinced that no minister in any country can answer why you, living in a free, democratic world and able to choose anything, including where to live, decided to live exactly where you live now. So even allowing for the lack of detailed information about living conditions around the world, the overall sum of decisions that shape quality of life is the main driver of demand for property in any location.
That is why public investment in infrastructure and involving business and residents in decisions about local development together make places attractive to live in, raise demand, bring private investment into property projects and bring the end of the downturn closer. Under these conditions the housing market has a chance of faster growth.
Still, not everything in construction is so bleak, but more on that in the next post.