The beginning of 2025 has brought a noticeable cooling in developers’ investment plans. While the number of construction starts has remained stable, building permits for new projects are down 21% compared to the same period last year. The real estate sector is waiting for a stimulus — and a potential interest rate cut may provide it.
Data from Poland’s Central Statistical Office for the first quarter of 2025 show a decline in residential construction activity compared to early 2024. Fewer building permits are being issued, and fewer new developments are being launched. However, March statistics appear more promising than those from February, suggesting some short-term recovery.
New Construction Projects
When comparing the number of newly started housing units with the pace of apartment sales on the primary market, there are currently no clear market signals pointing to upward pressure on housing prices. Data from Q1 indicate a continuation of the stabilization trend in the real estate sector.
From January to March this year, developers began construction on 36,531 new apartments — a figure closely aligned with the results of the two previous quarters. Yet compared to Q1 2024, this marks a 13% decrease in new housing starts.
“This decline is not necessarily cause for alarm. It stems from a high baseline at the beginning of last year, when developers ramped up investments in response to strong demand created by the ‘Safe 2% Mortgage’ program and expectations of a new support instrument,” explains Patryk Kozierkiewicz, legal counsel at the Polish Association of Developers (PZFD).
Given the record number of available apartments on the market, it’s likely that developers will slow down the launch of new projects. However, announcements from the Monetary Policy Council about possible interest rate cuts could serve as a catalyst for new investments.
“Lower rates would improve credit affordability and could encourage people who delayed home-buying decisions over the past year to finally make a move,” adds Kozierkiewicz.
Building Permits Drop Significantly
The first quarter saw an even sharper decline in building permits. Compared to Q1 2024, developers obtained nearly 21% fewer permits in the first three months of 2025.
“This nationwide drop may reflect unsatisfactory demand and the current surplus of available housing. If a developer struggles to sell existing units, they may be reluctant to pursue new investment opportunities,” says Kozierkiewicz.
It’s also worth noting that a slowdown in permit issuance could lead to a drop in new housing starts in upcoming quarters — particularly affecting smaller developers who lack the capacity to run multiple projects simultaneously.
Source: ceo.com.pl
