Housing stock and renewal ratio in Europe in the last decade: Turkey leading the way

Written by Bálint Parragi, ELTINGA-EECFA-BUILDECON

We have examined the relationship between the renewal ratio and the actual stock in Europe (across countries covered by EECFA and EUROCONSTRUCT) during the last decade (see figure below). The renewal ratio is the ratio of the newly built homes between 2011 and 2020 and the housing stock at the beginning of 2020.

EECFA covers the construction markets of Bulgaria, Croatia, Romania, Russia, Serbia, Slovenia, Turkey, and Ukraine. EUROCONSTRUCT covers the construction markets of Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, and the United Kingdom.

When analysing the data, we have found three different country groups:
(Click the heading named Group in the table above to rearrange the order)

  1. A heterogeneous group of countries with a building stock smaller than 10 million. There are some countries, mainly from Central-Eastern Europe and the Balkans with exceptionally low renewal ratios (lower than 5% during these ten years): Portugal, Bulgaria, Hungary, Slovenia, Croatia, and Serbia. Czechia and Romania also have renewal ratios very close to 5%. Except for Portugal, all countries in Western and Northern Europe within this first category have a higher renewal ratio: in Finland, Switzerland, and Austria, every tenth building was built during the last decade.
  2. This group consists of countries with a bigger building stock, but relatively low renewal ratios. Southern Europe (Italy and Spain), the United Kingdom, Germany, and Ukraine fall under this category. Only 3%-6% of their building stock was built during the 2010’s.
  3. This category comprises countries with the highest renewal ratios in the last ten years. Poland and France have similar building stock sizes to the ones in Ukraine and Germany, respectively, but their renewal ratio is significantly higher; around 11%. Poland is especially outstanding among the postsocialist countries with a bit more than 11% renewal ratios between 2011 and 2020, followed by Slovakia (8%). There are two absolute outliers; Turkey and Russia with the two highest renewal ratios: 28% and 15%, respectively, in 2011-2020. In Turkey, almost every third building is only just 10 years old or newer, and in Russia, it is every seventh. Russia has of course the largest building stock in Europe (almost 70 million buildings), but its great renewal ratio means that they built as many buildings in the last decade as there are in Romania in total. And Turkey built more buildings in the last ten years than Poland, Ukraine, Spain, the UK, and Italy combined.

Although in this piece renewal ratio is defined as newly built homes / building stock, it is always good to have in mind that not only new housing construction contributes to the renewal of the stock, but also renovation. In some countries, typically in Western Europe, its contribution to renewal is even higher than that of new construction. In our forecast reports you may find the development stories for both new and renovation types of works.

A visual summary to Euroconstruct Special Update August 2020

by János Gáspár – Buildecon, Hungarian member to Euroconstruct

In most countries the stories after the August revision remained pretty similar to those Euroconstruct forecast in June. Charts below are organized by region, the dotted black line represents the 2019 level. At Europe’ heartland and in the Nordic countries (in the top row) there are very stable markets. Except for Finland and Sweden, each of them foresees the total market in 2021 to be around the level of 2019. Out of the largest countries, the most sluggish recovery could be in the Netherlands, in the UK and in Spain. Poland seems to be crisis-resistant.