Paradoxes of the housing market in Poland: What’s going on in 2024

The Polish housing market in 2023 was characterized by high demand, which stimulated price growth in the market. In 2024, demand and activity in the apartment market decreased, but prices continue to rise. This paradoxical situation, along with the expectation of a new loan program “Credit #naStart”, prompted us to analyze the current state of the Polish real estate market.

Supply and demand

You can follow the trends of the Polish real estate market over the past 10 years in our analytics.

As for the current situation specifically, Narodowy Bank Polski has published statistics on purchase and sale transactions with apartments in the largest Polish cities following the results of the 1st quarter of 2024 – Warsaw, Krakow, Wroclaw, Poznan, Gdansk, Lodz.

So, in the 1st quarter of 2024, the apartment market showed a drop in demand. In five of the six largest Polish cities, the number of apartment transactions has decreased markedly compared to previous periods. 

Data on the results of the 1st quarter of 2024:

A drop in demand in the market and, as a result, a decrease in the number of purchase and sale transactions was expected – in January 2024, acceptance of applications for the “Safe Loan 2%” loan program was stopped due to the achievement of the lending limit. The limit itself was reached back in December 2023. 

The “Safe Loan 2%” program has been in operation since July 2023 and has provoked a large-scale increase in demand. The peak of the program fell on the 4th quarter of 2023: in total, during this period, 36% more apartment transactions were registered in the 6 largest cities of Poland than in the 4th quarter of 2022. 

Narodowy Bank Polski has not yet published data on the number of apartment transactions in the 2nd quarter of 2024, however, it can already be said that their number is unlikely to exceed last year’s figure. There are several reasons for this: noticeably reduced demand from buyers; high interest rates on housing loans; many potential buyers are “on standby” — they are waiting for the start of the credit program “Credit #naStart”, which will be more modest than its predecessor.

At a time when demand in the market was declining, the number of offers for the sale of apartments was growing. According to the OLXDATA platform, in the 6 largest Polish cities, the number of ads for the sale of apartments on websites Otodom.pl and Olx.pl in September 2024, it reached record levels.

Prices for apartments in new buildings and on the secondary market

According to Narodowy Bank Polski, data on the average price per square meter are aggregated into the following groups:

1. Warsaw.
2. The six largest Polish cities, not counting Warsaw (Gdansk, Gdynia, Krakow, Lodz, Poznan, Wroclaw).
3. Ten analyzed cities (Bialystok, Bydgoszcz, Katowice, Kielce, Lublin, Olsztyn, Opole, Rzeszow, Szczecin, Zielona Gora).

Apartment prices continue to rise in both the secondary and primary markets. According to the results of the 2nd quarter of 2024, the average price in the primary market of Warsaw was 16.021 PLN/sq.m (about 3724 EUR/sq.m) — this is 1% more than in the previous period and 22% more than in the 2nd quarter of last year. Read more in our detailed analysis of real estate prices in the Polish capital.

In the group of six cities, the average price per square meter increased by 21% over the year, in the 2nd quarter of 2024 amounting to 12.762 PLN/sq.m (about 2967 EUR/sq.m) — compared to the 1st quarter of 2024, the increase was 3%. 

The city with the most expensive square meter in this group is Krakow – 15.277 PLN/sq.m (about 3552 EUR/sq.m). Over the year, the average price per square meter increased by 32% – this is the largest annual price increase in the 2nd quarter of 2024; if we talk about quarterly growth, then in relation to 1 by the quarter of 2024, it was 4%. The city with the lowest average price per square meter in the group is traditionally Lodz – 9837 PLN/sq.m (about 2287 EUR/sq.m), +1% compared to the previous quarter and +12% compared to the 2nd quarter of last year.

The data below shows howhow has the average price per square meter for apartments changed in the primary market in the group of 10 analyzed cities.

The average price per square meter in the secondary market of Warsaw in the 2nd quarter of 2024 was set at 15,123 PLN/sq.m (about 3,516 EUR/sq.m) — this is 2% more than in the 1st quarter of 2024, and 15% more than in the 2nd quarter of 2023.

For a group of six cities, the average price on the secondary market was 11.443 PLN/sq.m (about 2660 EUR/sq.m) — an increase of 5% compared to the previous quarter, and +21% compared to the same period last year. 

The highest average price per square meter in this group is traditionally noted in Krakow – 14.585 PLN/sq.m (about 3391 EUR/sq.m), +7% compared to the 1st quarter of 2024, and +30% compared to the 2nd quarter of 2023. The lowest average price in Lodz is 7,602 PLN/sq.m (about 1,767 EUR/sq.m), which is 1% more than in the 1st quarter of 2024 and 19% more than in the 2nd quarter of 2023.

Below is data on how the average price per square meter for apartments on the secondary market has changed in the group of 10 analyzed cities.

Is there any other affordable real estate in Poland? Review of current prices and mortgage rates in an interview with an expert

Results

An analysis of the Polish real estate market in the first half of 2024 indicates the following key trends:

1. Decrease in demand: in five of the six largest Polish cities, there is a significant decrease in the number of apartment purchase and sale transactions compared to previous periods.
2. Supply growth: the number of ads for the sale of apartments in the largest cities has reached record levels.
3. Continued price growth: Despite the decline in demand, apartment prices continue to rise in both the primary and secondary markets.
4. Regional differences: There are significant differences in price dynamics between cities, with Krakow showing the largest price increases.
5. The impact of government programs: the completion of the “Safe Loan 2%” program has had a noticeable impact on the market, and the expectation of a new “Credit #naStart” program forces many potential buyers to take a wait-and-see attitude.
6. Record prices in Warsaw: the capital remains the most expensive market with prices reaching 16.021 PLN/sq.m in the primary market.

These trends point to a transitional period in the Polish real estate market. Despite the decline in demand, steady price growth indicates the continued attractiveness of real estate as an investment asset. The future development of the market will largely depend on economic policy, interest rates and the implementation of new government support programs.

Author

Roman Tomashevich Analyst

I show the situation on the real estate market in graphs and figures.

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