Market environment

The Polish market is stabilizing after rapid price growth in past years. The change is the result of a number of factors, such as rising interest rates making it more difficult to access mortgages, high inflation raising the cost of housing construction, the end of the “2% Safe Credit” program and market saturation in larger cities. Economic uncertainty is also making potential buyers cautious.

In recent years, real estate price growth in Poland has been among the fastest in the entire EU. The years 2018-2023 saw a 59% increase in housing prices (20% after adjusting for consumer price inflation). The current situation has been largely influenced by government programs, such as the “2% Safe Credit” that was in operation last year, under which some 55,800 loan agreements were signed.

One of the key challenges currently facing the housing market is the availability of mortgages. Although the average amount of mortgage applied for in September 2024 reached a record high of PLN 444,74 thousand, the number of loan applicants fell by 22% compared to the same month last year. The current level of interest rates, which is one of the highest in the European Union, significantly affects the availability of credit and thus the ability to purchase real estate.

The decline in the number of loan applications is due, among other things, to the end of the “2% Safe Credit” program, which had significantly stimulated the housing market in the past. In the absence of a new, similar support program and the high cost of credit, fewer and fewer people are choosing to buy property. An opportunity to bring them back could come from specific government actions or changes in credit conditions, such as lowering interest rates.
In Q3 2024, housing lending criteria were eased slightly and lending margins were lowered, with other lending conditions unchanged. For Q4 2024, banks do not announce any significant changes to lending criteria.

Poland’s current housing base is still relatively small compared to the rest of Europe. In 2022, it numbered about 15.6 million units, meaning that statistically there were just over 400 apartments per 1,000 residents. This is one of the lower levels in the European Union – especially when compared to Western Europe, where it is usually 450. The number of units per 1,000 residents is evidence of the still relatively low saturation of the housing market, which affects the long-term demand outlook and the low risk of a “housing bubble.”

The current housing gap in Poland is estimated at more than one million units. According to data from the Central Statistical Office, 220,379 housing units were completed nationwide in 2023, the lowest result in four years, while developers started construction of only 114,526 new units, the lowest result since 2017. The total number of new developments also declined compared to the previous year, reaching 189,093.