The real estate market in Poland records fewer transactions this year, even though transaction prices of apartments in the largest cities are still rising. Meanwhile in Europe, real estate investments are rebounding after interest rates were cut by the European Central Bank (ECB). Could a similar scenario be awaiting Poland? “It seems that the stagnation in the Polish market was linked to uncertainties regarding loans. Real estate investments enjoy tremendous trust here, and lower rates stimulate investment,” emphasizes Radosław Jodko, investment specialist.
The Monetary Policy Council is not lowering interest rates in Poland for the time being, with the market expecting reductions only in 2025. On the other hand, the European Central Bank has started to cut rates, much like the American central bank. The movements of both banks indirectly affect Poland.
Lower US rates affect Poland
“If someone believes that lower rates in the United States do not affect us, they are mistaken. With lower interest rates in the USA, we can expect capital to start flowing into emerging and developed markets, to which Poland belongs. This will first and foremost affect the stock market and interest in shares, but I wouldn’t be surprised if funds start looking for investments in the real estate market,” believes Radosław Jodko, investment specialist from RRJ Group.
He also draws attention to another correlation. “I wouldn’t rule out that a sharp path of rate cuts by the Federal Reserve could force a rate cut in Poland too, particularly if the dollar starts to drop significantly. We don’t see this yet, but we are still at the beginning of the cycle of American rate cuts,” says Jodko.
Increasingly expensive real estate in Europe
In Poland – even with declines – housing market prices, for example, are rising. European analysts expect increased demand for residential and logistic real estate – after a period of great instability.
“Interest rate cuts in the euro zone have resulted in the prices of real estate in Europe starting to rise. This market has experienced an investment downturn since 2022. Lower rates are always an incentive for investment, as cheaper loans increase demand. After all, this is a sector that largely depends on the availability of capital, so lower borrowing costs will reduce pressure on investors,” lists Radoslaw Jodko, an investment specialist from the RRJ Group.
Data corroborates this in a study conducted by Spanish BNP Paribas REIM, showing a trend change in the European market with rising property prices and declining capitalization rates.
“In Europe, the market expects a series of reductions until the end of 2025. Moreover, if the communication and policy of the ECB become concurrent with market expectations, adjusting financing costs will become easier. I also expect the European market to become much more competitive for investors, particularly considering prime real estate, which will significantly impact prices,” Jodko argues.
“Market analysis confirms that among different types of assets, residential real estate is gaining in popularity and is currently the main area of interest for investors in Europe. In countries like Spain, investments in this sector are so popular that we are experiencing high demand and a shortage of supply. Meanwhile, the industrial and logistics real estate sectors maintain their high momentum and remain a very good option for investors,” concludes Radosław Jodko, an investment specialist from the RRJ Group.
This is evidenced by data for the first six months of the year, where global investments in the industrial and logistics real estate segment reached 70 billion euros, an increase of 9% compared to the average from 2015-2019.
Source: https://managerplus.pl/rynek-nieruchomosci-w-polsce-zwalnia-ale-ceny-nadal-rosna-jak-obnizki-stop-procentowych-w-europie-i-usa-wplyna-na-rynek-90341
