Following the downturn in the Nordic construction and property market in 2009, 2010 was marked by recovery and stabilization, although several submarkets remained challenging. The housing market became stronger. The positive market trend is expected to continue in 2011.
New production of housing units increased in Sweden and Finland, while the Norwegian and Danish markets experienced a weaker trend. In the office and other buildings segment, the market remained challenging, although market conditions improved during the second half of the year. The continued strong construction of infrastructure benefi tted the civil engineering market. Demand for commercial property projects was better in 2010 than in 2009.
The number of property transactions increased, albeit from a low level. For 2011, market prospects are stable – the Nordic construction and property market is expected to experience some growth. The civil engineering market is expected to remain stable. Market conditions for the property market are forecast to improve, although the recovery will progress slowly.
As a rule, the construction market tracks the general economic trend but with a time lag of at least one year. The housing market generally reacts the fastest to economic cycles. The housing market is also particularly sensitive to changes in interest rates and employment.
Interest in leasing commercial premises is also determined by economic trends and employment. Demand for investments in property projects is largely controlled by the leasing rate, market transparency and access to funds in the financial system.
Other building construction (offices, industrial and public premises) and the civil engineering market are subject to a greater time lag, since such projects depend on the investment plans of other industries. This also results in construction projects frequently being procured during one economic cycle and produced during another. As a rule, larger projects also extend over a longer period of time.