EcoUp’s Q32024 Business Review, Market Outlook:
The company’s own estimate continues to be that the market for small-house construction will turn for the better in the first half of 2025, and in 2026, small-house starts will return to the long-term average of approximately 10,000 units. The company’s financial targets for the Insulation Business by the end of 2026 are also based on this estimate.
In my opinion, it is entirely justified to ask whether the assumptions underlying the setting of these targets are realistic. When examining housing starts by type of house (rolling annual sum), one has to look quite far back in history to find these volumes. Considering detached houses and terraced houses, these levels were last sustained in early 2014 and before. After that, we lived in a zero-interest rate environment for a long time, and these figures were briefly reached around 2017/2018.
https://rt.fi/tietoa-alasta/tilastot-ja-suhdanteet/kuviopankki/asuntomarkkinat-kuvaajat/
Currently, there are very few drivers that would quickly turn the small-house market into strong growth, even though pent-up demand certainly exists beneath the surface. The consumer confidence indicator for 12/2024 was -8.6.
https://stat.fi/tilasto/kbar
https://stat.fi/julkaisu/cllxls7104csr0aw55xdhuqdo
Only 11 percent of consumers considered the time opportune for expensive purchases. Fewer people than before intended to buy a home or a car.
It is just as easy to draw a negative scenario alongside the positive one. I prefer to calmly observe how the market develops rather than flipping a coin. In addition to the number of housing starts, the peace in Ukraine and its effects on the availability and prices of labor and building materials have been written down as a major risk in my notes. In a bad scenario, construction costs could once again jump upwards, causing a prolonged ice age in the market if consumer purchasing power and confidence in their own finances do not keep pace. In a good scenario, rising building material prices could improve margins, and positive developments in consumer purchasing power and confidence could stimulate the markets. Who knows how this will turn out.
Edit. clarification to the text.