CUI Programming in Central and Eastern Europe

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Opportunities for Canadian Housing Exporters in Central and Eastern Europe

The Canadian Urban Institute was commissioned in 1996 by Canada Mortgage and Housing Corporation (CMHC) to undertake a study on opportunities for Canada’s housing exporters in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) to assist them in entering or expanding their market share in the region. The aim of the study was to provide a comprehensive understanding of the regional marketplace, identify prospects for the Canadian housing industry and provide advice for both new and existing Canadian exporters on strategies for approaching those housing markets. In-depth analysis and evaluation was undertaken on 12 countries – Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovenia, Slovakia and Ukraine. The study highlights key findings in a number of key areas, including trade patterns between Canada and the region, an analysis of the local business environments, strategies for approaching opportunities and institutional support for Canadian housing exporters. The study concludes that taking into account the potential size of the long term market, the high level of local interest for Western goods and services and the fact that the market could remain unsatisfied for many decades, Canada’s housing sector should immediately position itself to ensure a substantial share of the long term market.

Table of Contents

Summary
Funding Agency
Timeframe
Geographic Focus
Project Partners
Background
Project Description
Approach

Central and Eastern Europe (Map: European Environment Agency)

Funding Agency
Canada Mortgage and Housing Corporation (CMHC)

Timeframe
1996

Geographic Focus
In-depth analysis and evaluation was undertaken on 12 countries – Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovenia, Slovakia and the Ukraine.

Project Partners
Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) are emerging as important destinations for housing-related Canadian exports. Canada’s housing exports have included building materials, manufactured components and complete building systems, as well as a range of experience in urban planning, designing and building houses as well as managing the building process. Canada’s housing exporters are targeting their products and services toward the provision of new housing, as well as refurbishment and improvement of existing housing.

Background
CEE and the CIS are emerging as important destinations for housing-related Canadian exports. Canada’s housing exports have included building materials, manufactured components and complete building systems, as well as a range of experience in urban planning, designing and building houses and managing the building process. Canada’s housing exporters are targeting their products and services toward the provision of new housing, as well as refurbishment and improvement of existing housing.

Project Description
The aim of the study was to provide a comprehensive understanding of the regional marketplace, identify prospects for the Canadian housing industry and to provide advice for both new and existing Canadian exporters on strategies for approaching those housing markets.

The objectives of the studies were:

To examine the characteristics of and future trends in housing markets in the region.
To profile the involvement of Canadian housing exporters in the emerging markets of the region.
To identify opportunities in the region and barriers to participating more efficiently in the marketplace.
To define specific priorities and strategies for approaching those opportunities.

Selected key findings included the following:

Opportunities for the Canadian housing industry in CEE and the CIS:

The absence of mass markets means that the most attractive opportunities for Canadian firms in both the short and long term will be in small-scale, niche markets.
Deregulation of energy prices has created a demand for energy-efficient retrofitting of existing structures, particularly high-rise, pre-cast concrete apartment blocks.
Opportunities for professional services and training are broad and relate generally to increasing the capacities of institutions to operate in a Western business climate.
Privatization of state-owned construction and building material firms also offers some promise, although the return on the investment will likely be in the long term.

Opportunities for the Canadian housing industry in CEE and the CIS:

In terms of the political-legal environment, although all the countries of the region are committed to the transition to a market economy, the approaches and successes of individual countries differ considerably.
A suggested market approach is to start small, developing a niche in a single local market and then gradually expand geographically or in terms of product range.
While the potential for growth in CEE and CIS are generally good, these markets present commensurate business, political and economic risks. Business risks stem from the differences in business culture.

Approach
The core of the information used in the study was drawn from published statistical sources, research and industry reports, as well as from consultations with key organizations involved in supporting housing-related exports to the region. The information was supplemented by a series of in-depth interviews with Canadian housing exporters who had had considerable experience in the region. Research and analysis were undertaken by the CUI’s regional offices in Hungary, Estonia, Latvia and Lithuania. In addition, a survey of Canadian Trade Commissioners posted in the countries selected for in-depth investigation helped to identify specific opportunities. Finally, a one-day, facilitated workshop was held in Toronto which enabled housing industry representatives with experience in the region to share their views and perspectives on opportunities and barriers.