We have confirmation of falling apartment prices. According to the latest data from the National Bank of Poland (NBP), declines were observed in the secondary market in Q4 2024 in 10 out of 17 cities surveyed. Additionally, according to our data on asking prices in January, compared to October, prices dropped in 12 out of 17 cities. The report from Rankomat.pl and Rentier.io suggests, however, that these declines were too small to restore “normal” affordability. For a couple earning 80% of the average salary each, the mortgage payment consumes 45% of their income. A return to normal affordability, around 31%, would require much larger price reductions or a decrease in mortgage rates to about 4%. In this context, it seems that the “First Keys” program was well-prepared.
Let’s start with the latest NBP data, which show the asking and transaction prices in Q4 2024. These confirm the price declines, which were especially common in the secondary market. Regarding transactions, declines compared to Q3 2024 were recorded in 8 out of 17 cities. The biggest drops were seen in Szczecin (7.2%) and Warsaw (6.2%). Even larger declines were seen in asking prices—apartments became cheaper in 10 out of 17 cities. These changes in asking prices will influence transaction prices in Q1 2025, as buyers on the secondary market typically need 1–2 months to secure a mortgage.
On the primary market, however, the price decreases were much less significant. Transaction prices were lower than in Q3 2024 in only 4 out of 17 cities. The most significant drops were in Wrocław (-4%) and Kraków (-3%). In asking prices, declines were observed in 5 out of 17 cities surveyed.
However, it should be noted that compared to Q4 2023, prices have increased in all surveyed cities. At the same time, wages increased rapidly during this period. This raises the question of how housing affordability has changed. We checked it for a couple earning 80% of the average salary each, who wish to purchase their first 50 m² apartment with a mortgage. Their own contribution is 10%. The apartment price is based on the average transaction price on the primary market in the 7 largest cities according to NBP data.
The mortgage payment would consume 45% of the couple’s income
In Q4 2024, this purchase would require spending PLN 713,250. The mortgage payment, with a 10% down payment, would be approximately PLN 4,459 and would consume 45% of the couple’s income. On the one hand, this is noticeably lower than in the second half of 2022 when interest rate hikes pushed this share up to 52%. However, 45% is still a very high percentage. Banks are usually reluctant to grant loans when the payment exceeds 40% of income. The graph also shows that from 2014 to mid-2020, this percentage ranged from 28% to 32%.
This pattern changed only with the pandemic, specifically with the ultra-low interest rates, which reduced this share to about 26%. However, after that, there were sharp interest rate hikes, pushing the share back to 52%.
Mortgage loans in Swiss francs helped affordability in 2007-2008
It is also worth briefly mentioning the situation from 2007–2008, when the mortgage payment share of income was 60%–70%. In practice, the level was lower, around 50%, because loans were predominantly in Swiss francs, and our calculations refer to loans in Polish złoty. Meanwhile, the interest rate on Swiss franc loans was much lower than on złoty loans.
4% interest rate restores normal housing affordability
Returning to the current situation, with apartment prices and wages from Q4 2024, a return to normal affordability, with the mortgage payment share at about 31%, would require a reduction in interest rates to 4%. It seems, therefore, that the “First Keys” program has been well-prepared.
Housing affordability for buyers without mortgage assistance
The current problem with housing affordability is largely due to high interest rates. Looking only at the relationship between prices and incomes, it seems that prices are only slightly inflated. To illustrate this, imagine a couple whose income is five times the average salary. This couple wants to buy a 100 m² apartment without using a mortgage. As in the previous case, we assume the price is the average transaction price on the primary market for the seven largest cities.
In Q4 2024, this couple would have to spend 46 months of net salaries on the mentioned apartment. In comparison, from the second half of 2022, this was usually between 41 and 46 salaries. It wasn’t until last year that this level increased to 47–48 salaries in Q1–Q3, but in Q4, it dropped back to 46. Thus, the ratio of income to apartment prices is not significantly different from what we observed in the last 12 years. The most evident bubble on the market occurred in 2007–2008 when such a couple would have to spend more than 70 salaries to buy such an apartment.
Apartment prices are unlikely to drop too much
Since apartment prices have started to fall, their affordability for wealthier buyers will likely improve. Let’s check what would happen if, by Q4 2025, prices were 10% lower than in Q4 2024, and wages increased by 8%. In that case, the number of salaries needed to buy an apartment would drop to 42, almost the lowest recorded level, which was 41.
The conclusion is that the downward trend that is starting will probably not lead to significant price reductions. If prices fell more than 10%, apartments would become extremely attractive for high-income individuals. Additionally, interest rates are expected to decrease, and a new support program for purchasing a first home is expected. Therefore, it is unlikely that apartment prices will drop too deeply, and the declines will likely remain in the single digits.
Łódź and Rzeszów reach record prices
Finally, let’s look at the most recent data available, the asking prices from January 2025. According to this data, compared to December 2024, declines were seen in 10 out of 17 cities. The largest monthly drops were observed in Radom (-6%) and Sosnowiec (-3.5%). However, there was a noticeable price rebound in Gdańsk, with a 4% increase month-over-month. Record prices for new listings were recorded in Łódź (PLN 9,500, +1.3%) and Rzeszów (PLN 10,149, +2.6%).
Over a three-month period, the number of price declines was even higher. They were observed in 12 cities, while prices remained unchanged in one city (Lubin), and increases were recorded in only 4 cities. However, it should be added that the declines are generally small for now. Therefore, compared to the year-on-year data from January 2024, apartments are still more expensive in all the surveyed cities. The average increase is 6.9% year-over-year.
The number of active listings rose to 112,000
As for the housing supply, after the peak in listings in October, the number of listings for apartment sales decreased. In November and especially in December, noticeably fewer new listings were added. However, this was a temporary, typically seasonal phenomenon.
In January 2025, 44,000 new unique apartment sale listings were recorded, a 41% increase compared to December 2024. This indicates a return to normalcy, which characterized most of 2024, marked by an increase in the supply of apartments for sale.
In total, we counted 112,000 active and unique listings in the cities we analyzed in January, bringing the supply level close to the peak values of 2024.
