According to Bank Pekao’s latest report, “The Real Estate Market in Poland 2024,” property prices in Poland have yet to reach their peak. The report highlights that rising incomes, potential for improved lending, and high market demand are key factors driving this trend.
From 2018 to 2023, Poland experienced one of the fastest real estate price increases in the EU, with prices soaring by 59%, placing it among countries like the Czech Republic (63%), Estonia (69%), Lithuania (74%), and Hungary (85%). Despite the sharp price hikes, inflation-adjusted figures show a 20% rise in housing costs relative to the consumer basket.
Interestingly, the report notes that wages in Poland are growing at a pace comparable to real estate prices. This stability in purchasing power allows Poles to afford housing despite rising prices. The analysis also mentions a notable decline in mortgage accessibility in 2022-2023 due to increased interest rates, affecting mainly those who do not benefit from government-subsidized mortgages.
High mortgage costs, driven by elevated NBP interest rates, are currently the only short-term factor that might slow down housing demand. However, with only 30% of housing transactions in Poland financed through loans, the overall impact on the market is limited.
Support programs like the “Safe Loan 2%” have effectively reduced the interest rates for borrowers, and targeted assistance programs are expected to help the most vulnerable consumers in the coming years. Additionally, former Swiss franc borrowers are likely to re-enter the market, further boosting demand with recovered capital.
Bank Pekao’s analysts predict that the cooling effect of high interest rates will become noticeable by the second quarter of 2025, potentially leading to a temporary price decline. However, strong demand will likely prevent significant long-term price drops.
The report also emphasizes Poland’s significant housing needs, with too few and overcrowded dwellings. Developers are responding to the high demand by increasing the number of new builds, with construction starts in February 2024 nearly doubling from the previous year, despite challenges in acquiring new land.
In the long run, demographic changes are expected to stabilize the market as Poland’s population declines. However, this effect will likely bypass major urban areas, which are projected to grow in population through 2040.