Tuesday, 2 December 2025
The Polish residential market is moving through a period of relative calm after several years of rapid growth. In 2025, prices in the largest cities stopped rising at the pace seen earlier in the decade, with some markets even recording slight reductions in achieved sale values. This cooling followed a period of weaker demand, influenced mainly by the high cost of credit that limited buying power.
Although prices remain high by historical standards, the slowdown marks a notable shift from the double-digit annual increases observed in recent years. Negotiations between buyers and sellers have become more effective, especially in major metropolitan areas, where final sale prices in places such as Warsaw, Wrocław and Kraków registered mild year-on-year declines. The secondary market reflected similar behaviour, with modest decreases in several cities.
Economic conditions, however, suggest this phase may not last long. Poland’s economy regained momentum in the second half of 2025, recording its strongest GDP growth in three years. Inflation eased back toward the central bank’s preferred range, allowing policymakers to gradually reduce interest rates. Over the course of the year, the benchmark rate was cut by 150 basis points, and analysts expect room for additional reductions in 2026 if consumer prices remain under control.
Lower borrowing costs have already revived interest in home loans. Banks issued nearly 65,000 new mortgages in the third quarter of 2025—more than 40 percent above the level a year earlier—with the total value of new lending also increasing. The average loan size continued to climb, reflecting both higher prices and renewed confidence among households. With lenders easing some of their criteria, the flow of new applications has risen steadily since mid-year.
On the supply side, developers are still cautious. Permits issued for new housing projects fell compared with 2024, especially for multifamily developments, which could limit future availability. At the same time, the cost of construction is gradually increasing, adding pressure to project budgets. Any legislative changes affecting development—planned for the coming years—may further influence the economics of new projects.
Despite the uncertainty, long-term demand remains supported by several structural factors. Poland continues to experience one of the highest rates of household overcrowding in the European Union, and the preference for owning rather than renting remains strong. Large cities continue to attract both internal and international migrants, concentrating demand in metropolitan areas. These conditions—combined with the current slowdown in new supply—may contribute to firmer prices once borrowing becomes more accessible.
The rental sector, especially professionally managed schemes, is also growing quickly. High purchase prices and lifestyle preferences among younger residents are driving more interest toward long-term renting, encouraging institutional investors to expand their portfolios in Poland’s biggest cities.
Overall, the current period of stabilisation may prove temporary. If borrowing continues to become cheaper and the economy maintains its pace, demand for apartments is likely to strengthen in 2026. Market analysts expect price growth to reappear from the second quarter of next year, although at a more moderate speed than during the previous boom.
Sources: Colliers, NBP and CIJ EUROPE Analysis Team
