Poland's real estate market remains a dynamic and attractive investment opportunity, balancing affordability with steady growth. In this analysis, Penteris Head of Real Estate Andrzej Tokaj explores key market trends, investment potential, and the factors shaping Poland's housing landscape in 2025.
Current Trends
- Price Stability and Growth: The Polish housing market is expected to stabilise as 2025 proceeds, with prices likely to increase at a rate close to inflation or slightly lower. Despite this stability, the market is poised for continued growth, with an anticipated increase in prices, according to forecasts by major real estate consulting firms.
- Affordability and Investment Potential: Poland offers a unique blend of affordability and modernity, making it an attractive investment destination compared to Western European markets like Berlin or Paris. The average cost per square metre in Warsaw is approximately €3,600, much lower than in major Western European cities, as reported by property market analysts.
- Housing Availability: Poland has a lower housing saturation index compared to the EU average, with about 420 units per 1,000 inhabitants and one of the lowest housing standards in the EU, with an average flat size of 75.5 m² (21 m² below the EU average), an overcrowding rate of 35.8%, and limited living space (1.1 rooms per person) indicating potential for further development, according to data from the European Commission.
Regional Comparisons
- EU Comparison: Poland's housing market is more affordable than many EU countries, with lower prices per square metre. However, it lags behind in housing availability, offering opportunities for growth, as noted by EU housing market reports.
- USA Comparison: Poland's market is generally more affordable and less saturated than many U.S. cities. The U.S. market often experiences higher price volatility and regional disparities, whereas Poland's growth is more consistent and driven by economic factors, as observed by international real estate experts.
Key Factors Influencing the Market
Government Policies and Interest Rates: Inflation is expected to go down in the second half of 2025, which in turn should lead to cuts in interest rates, thus supporting demand for housing loans, according to forecasts by financial analysts. However, government policies remain uncertain, which could impact market dynamics.
- Land Availability: The availability of land for investment is becoming a challenge, particularly in major cities, which may affect future housing supply, as highlighted by local real estate developers.
- Credit Availability: The reversal of negative trends in housing loans in 2024 is expected to continue, supporting market growth, as reported by banking sector reports.
Investment Opportunities
- Residential Sector: The residential market offers stable investment opportunities, with rental yields averaging around 6.5% in Warsaw, according to property investment firms. Poland's growing private rental sector (PRS) and luxury market also present attractive investment options.
- Infrastructure and Development: Poland's ongoing infrastructure projects, such as transportation developments, enhance the appeal of its real estate market by improving connectivity and accessibility, as noted by infrastructure development reports.
Poland's real estate market presents a compelling investment opportunity due to its affordability, growth potential, and stability. While challenges like land availability and policy uncertainties exist, the market's resilience and ongoing economic growth make it an attractive choice for investors seeking stable returns in Europe. According to the UBS Global Real Estate Bubble Index 2024, the risk of a real estate bubble in Warsaw has been classified as low, with a score of 0.2. This places Warsaw at a lower bubble risk than cities like Paris, Madrid, Frankfurt, and Amsterdam.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
