The past year saw a significant increase in investment activity by real estate developers in Poland, resulting in a large—and in some cities, record-breaking—supply of new apartments. Experts at RynekPierwotny.pl analyzed how this impacted prices and availability, as well as what the future holds for potential buyers seeking housing loans.
2024 Housing Market Overview
“This past year has once again demonstrated the strong interdependence between the housing loan market and residential property markets in cities with the highest housing demand,” said Marek Wielgo, an expert at RynekPierwotny.pl.
The first quarter of 2024 was busy for both banks and developers. Both sectors signed numerous contracts with beneficiaries of the “Safe Loan 2%” program, which ended last year. However, activity in bank branches and sales offices in Poland’s seven largest cities began to slow in subsequent months.
Despite this, 2024 was not a poor year for banks or developers. Banks are expected to issue 25% more housing loans compared to the previous year and over 50% more than in 2022 during the COVID-19 pandemic. For developers, however, 2024 will likely lag behind last year in terms of sales. Nonetheless, cities like Łódź are showing positive results, with approximately 4,900 development agreements signed. Similarly, housing sales in the Upper Silesian-Zagłębie Metropolis (GZM) are close to the record levels of 2023, driven by the “Safe Loan 2%” program. Poznań also showed steady sales, avoiding a stagnation in demand.
“What connects these three metropolitan areas? Affordable housing prices per square meter. In cities with the highest prices, the slowdown is more pronounced. In Kraków, 2024 might be the worst year in the past six years, while in Warsaw and Wrocław, only 2022—a year of credit market stagnation—was worse. This shows that housing has become unaffordable for buyers relying on loans, and demand from cash buyers has also declined,” Wielgo explained.
Developers appear to have adjusted their strategies, as reflected in a 1% drop in average price per square meter in Warsaw during the last quarter, while Kraków saw prices stabilize. Developers introduced relatively affordable apartments, leading to increased sales, particularly in May, when Warsaw, Łódź, Poznań, and GZM saw a surge in the supply of popular housing segments.
Record Supply of Apartments
In 2024, developers introduced more apartments to the market than they sold, resulting in a significant and, in some cities, record-breaking housing supply. By late November, over 15,800 apartments were available in Warsaw—nearing the 2019 peak of 16,200. Similar trends were observed in Kraków (8,600), Wrocław (8,900), and the Tri-City (7,100). Meanwhile, Łódź, Poznań, and GZM also set new records for housing availability, with nearly 9,500, 7,800, and 9,600 apartments, respectively.
Despite this abundance, the availability of affordable apartments declined. For instance, in Warsaw, the number of units priced below 10,000 PLN per square meter dropped from 317 at the end of 2023 to around 100 by November 2024. A similar decline was observed in Kraków, Łódź, and Wrocław. GZM was an exception, where the number of affordable units increased.
Although the increase in the average price per square meter has slowed, prices remain significantly higher than last year. Wrocław leads the price growth race with a 12% increase, followed by Łódź (10%) and Poznań and the Tri-City (8%). Meanwhile, Kraków and GZM saw prices rise by 6%, and Warsaw recorded the smallest increase at 5%.
2025 Housing Market Forecast
Looking ahead to 2025, the government’s decision to discontinue the “Housing Loan #naStart” program and vague promises of new initiatives will likely lead to speculation about alternative support measures for homebuyers. How developers and their potential clients respond remains to be seen.
“The supply of new apartments in major cities is already so large that some developers will likely slow down new projects. However, a repeat of the 2022 and early 2023 scenario, when developers halted investments due to fears of a recession, unemployment, and declining wages, is unlikely. On the contrary, EU-funded projects under the National Recovery Plan could give the economy a significant boost,” Wielgo predicted.
Should the government implement a new loan support program, its benefits will likely be limited to a small group of buyers. Unfortunately, a significant improvement in access to housing loans on market terms is unlikely next year. While the National Bank of Poland (NBP) may begin lowering interest rates, the process will likely be slow compared to the sharp increases of 2022. A noticeable revival in the housing loan market may not occur until 2026 or even later.
“Nevertheless, a moderate increase in housing demand is possible if developers adjust prices to the modest budgets of loan-dependent buyers. Many are already struggling with rising living costs, including energy prices, which are consuming an increasing share of household budgets,” Wielgo said.
He anticipates price stabilization or even slight declines in average prices per square meter in major cities next year if developers prioritize affordable housing for average buyers. Late 2024 trends in Warsaw, Kraków, Łódź, and Poznań suggest this scenario is plausible.
However, an unfavorable scenario could also unfold, with an increase in supply focused on high-end apartments targeting wealthy buyers. This would drive up the average price per square meter again, as seen recently in the Tri-City. Additionally, the risk of cost increases due to overlapping infrastructure investments under the National Recovery Plan could raise prices for construction materials and labor.
Source: RynekPierwotny.pl
