The global property market is ever-changing. While many nations are currently experiencing a drop in housing prices, some are instead amidst a boom. One of these booming nations is Poland, which saw an 18 percent annual rise in 2024. In today’s article, we take a look at four key factors influencing Poland’s booming property prices.
Increased home ownership
Home ownership is growing in Poland. According to information from the Compare the Market home loans team, the European country saw a 4.7 percent increase in home ownership between 2011 and 2021, which was the largest growth of any of the 35 countries looked at. There are several factors contributing to this growth – but maybe most importantly, the Polish government has introduced various programs to support homeownership, particularly for first-time buyers. This includes initiatives such as “Family’s Own Home” and “Mieszkanie Plus”, the latter of which aims to increase the number of new homes, with a plan to eliminate the queue for social housing.
Influx of Ukrainian refugees
One of the most significant contributors to Poland’s housing situation is the influx of refugees from Ukraine. Since 2022, Poland has become a primary destination for displaced Ukrainians, leading to a sharp increase in demand for housing, particularly in major cities like Kraków and Warsaw. In fact, as of 1st April 2022, Kraków and Warsaw saw a population increase of 23 and 15 percent, respectively. As more people seek long-term accommodation, both rental and property prices have surged to meet the rising demand.
Limited housing supply
While demand for housing is growing, the supply of new homes has struggled to keep pace. Poland’s real estate development sector has faced a number of challenges in recent years, and new homes aren’t being built at the pace needed to accommodate the market. For example, data from Garbe shows that Warsaw has 5,000 existing rental units and 15,000 currently being built, however, it’s estimated that the market demand is 200,000 units. This supply-demand imbalance has contributed significantly to the increase in property prices, as buyers compete for a limited number of homes.
Rising interest from foreign investors
Poland’s booming real estate market has attracted the attention of foreign investors, particularly from Western Europe. Many individuals from Ukraine, Germany, Belarus, and elsewhere are investing in properties within Poland. The country’s relatively affordable property prices, compared to other EU nations, combined with its stable economy, make it an attractive destination for real estate investment. Company sales data from Atal shows foreigners account for around 3 to 5 percent of Poland real estate transactions.
Strong economic growth
Poland’s economy has been on a general upward trajectory for several years, with steady GDP growth, increasing wages, and low unemployment rates. This economic stability has encouraged more Poles to invest in property as a store of wealth. The country’s rising middle class has particularly fueled demand for new homes and apartments, which, in turn, has driven up housing prices. With the country’s economy forecasted to continue growing, the demand for housing is expected to remain strong.
Poland’s housing price boom is the result of a perfect storm of factors, from the influx of Ukrainian refugees, to economic growth, a shortage of available housing, and rising interest from investors. With these factors in play, it’s no wonder that the Polish real estate market is experiencing such a surge. This hasn’t gone unnoticed by foreign investors, reinforcing Poland’s position as a top destination for real estate investment in Europe.
