Saturday, 15 March 2025
The Polish housing market is expected to stabilize in 2025, with no significant price drops anticipated, according to a report by Otodom and Polityka Insight. This environment will be favorable for developers, allowing them to meet sales targets without the risk of a market collapse.
“This will be a year of relative calm as the market moves toward stabilization,” said Lewicki, co-author of the report, during a webinar discussing the findings from “Kwartalnik. Report on the Housing Market in Q4 2024”. Despite speculation, real estate prices have not started to decline, and localized promotions or discounts should not be seen as the beginning of a broader trend. Instead, these price reductions reflect individual strategies by developers or property owners aiming to boost sales.
The report highlights that demand remains strong, enabling developers to proceed with planned investments. While sales will not reach the highs of 2020-2021 or 2023, they are expected to remain stable, preventing any significant industry downturn or developer bankruptcies.
Banks are expected to ease mortgage lending, reversing the restrictions imposed over the past two years due to interest rate hikes and tighter mortgage regulations. The Safe Credit 2% program, launched to assist young buyers, has granted over 90,000 loans in 2023 and 2024. However, the program’s impact was uneven, failing to reach the most financially vulnerable buyers while driving up prices, particularly for smaller apartments in major cities.
With inflation slowing and wages recovering, housing affordability is expected to improve in 2025, allowing more first-time buyers to enter the market.
Young Poles continue to prefer property ownership, as the rental market remains expensive and underdeveloped. Poland has one of the highest rates of young adults living with their parents in Europe, primarily due to limited affordable rental options. While there is increasing support for social housing initiatives, private ownership remains the dominant choice.
The secondary housing market is becoming more attractive, particularly in urban centers. While city centers were previously dominated by wealthier buyers, demand shifts may revive mid-tier developments in central areas, especially as smaller developers acquire land from housing cooperatives or resolve legal uncertainties on urban plots. These conditions could lead to the creation of affordable housing in prime locations, catering to buyers priced out of the luxury segment.
Despite expectations for major policy shifts, 2024 saw little legislative action in the housing sector. Investors are still awaiting regulatory clarity, particularly on measures to ease land availability and improve spatial planning. The lack of reforms, such as eliminating parking space requirements in urban developments, continues to hinder new construction projects.
However, as 2025 is an election year, sudden policy changes remain a possibility. “Housing policy is unpredictable. New regulations can emerge unexpectedly, drastically reshaping the market,” the report warns. Past government interventions have stimulated demand temporarily, only to create instability when programs were discontinued.
The last quarter of 2024 signaled a return to stability, with quarterly price growth slowing to 1.4%. Price increases are now more evenly distributed across different apartment sizes, except for luxury units over 90 m², which saw larger price hikes due to high-end investments.
Notably, prices of older apartments have declined, with pre-1990 properties losing 0.3% in value, and pre-war buildings dropping 1.8%. Meanwhile, housing supply continues to expand, increasing 3% from Q3 2024 and 29% year-on-year, with newly built apartments now representing 57% of available listings.
Land prices have risen slightly, reaching PLN 253 per m², a 4.1% increase compared to last year.
“The past five years in Poland’s housing market have been a rollercoaster, with periods of rapid price growth alternating with slower phases,” said Katarzyna Kuniewicz, Director of Market Research at Otodom. The current market resembles late 2022, just before the introduction of government stimulus programs. While it remains uncertain whether price growth will slow further in early 2025, all signs point toward long-awaited stabilization.
Source: Otodom/Polityka Insight and ISBnews
