⚠ Construction Costs Can Run AwayModerate threat

Dom Development (DOM) — threat to the moat

Scale softens input inflation; it doesn't repeal it.

A scale-driven cost edge is a relative advantage, not protection from the thing that most damages developers: runaway construction-cost inflation. When materials and, above all, skilled labour surge in price — as they have repeatedly in Poland's tight building market — margins compress across the industry, and being a bit cheaper than rivals is cold comfort if the whole cost base has jumped faster than selling prices can follow. So far Dom has held the line — the 2025 net margin widened toward twenty percent even at record volume1 — and building-material prices rose only 1,1% over the first half of 2026, though 3,5% year on year in June alone, with timber and OSB boards up 11%2. The group's gross margin did fall, to 30,9% in the half from 35,2%, but the company puts that down to the mix of projects delivered rather than to costs3. Labour shortages, though, are a structural feature of the Polish trades, and a fixed-price contract signed before a cost spike can turn a profitable project into a marginal one. Scale softens the blow; it does not deflect it.

Construction material prices, 2026 (% change)OSB and timber, H1+11%Insulation, H1+5%All materials, June y/y+3,5%All materials, H1+1,1%Dom Development H1 2026 management report, citing PSB building-materials data
Costs are rising again, but slowly: the margin fall in the half came from project mix, not materials.
References
  1. ReportedFY2025 net margin widened toward 20%.
    Dom Development FY2025 results announcement (17 March 2026) — record net profit 654,2m zł (+15%), revenue 3,26bn zł (+2,8%), operating profit 801m zł, net margin ~20% (from 18%); net sales 4 448 units, the highest in the company's 30-year history — FY2025 · publ. March 17, 2026 · source ↗
  2. ReportedBuilding-material prices rose 1,1% over the first half of 2026 and 3,5% year on year in June, with timber and OSB boards up 11%.
    Dom Development H1 2026 management report - construction material prices +1,1% in H1 2026 and +3,5% year on year in June (OSB and timber +11%, insulation +5%, PSB data); group gross margin 30,9% against 35,2%, attributed to project mix; BIK housing-loan enquiries +15,8% by value in June 2026, average amount PLN 506,6k (+6,2%); 49% of Q2 2026 units bought with buyers' own funds only; optimal land bank at least four years of sales; annual dividends since the 2006 listing — H1 2026 · publ. 2026 · source ↗
  3. ReportedThe group's gross margin fell to 30,9% from 35,2%, which the company attributes to the mix of projects delivered.
    Dom Development H1 2026 management report - construction material prices +1,1% in H1 2026 and +3,5% year on year in June (OSB and timber +11%, insulation +5%, PSB data); group gross margin 30,9% against 35,2%, attributed to project mix; BIK housing-loan enquiries +15,8% by value in June 2026, average amount PLN 506,6k (+6,2%); 49% of Q2 2026 units bought with buyers' own funds only; optimal land bank at least four years of sales; annual dividends since the 2006 listing — H1 2026 · publ. 2026 · source ↗
Sources
Generated September 24, 2026