Polish housing market poised for continued growth: 8% in 2025, 10% in 2026-2027

The Polish housing market is set to continue its upward trajectory, with an expected growth of approximately 8% in 2025, followed by an acceleration to 10% annually in 2026-2027, according to Marta Petka-Zagajewska, Director of the Macroeconomic Analysis Office.

“The negative trend in housing loans, which had slowed the market in previous years, was effectively reversed in 2024, marking an 8% increase in activity. We anticipate a similar rate of expansion in 2025. While we don’t expect the high-paced dynamics of the past decade, primarily due to monetary policy constraints, we foresee a stabilization of interest rates at around 3.5%, allowing for an accelerated housing market growth of approximately 10% per year by 2026-2027,” Petka-Zagajewska stated during a briefing with journalists.

Despite recent fluctuations, structural factors indicate substantial room for continued growth in Poland’s real estate sector. Housing availability per capita remains below EU averages, highlighting an ongoing undersupply of residential units. Currently, Poland has approximately 420 apartments per 1,000 inhabitants, significantly lower than the EU average of over 500.

“One of the key drivers of housing demand is the mortgage market, which has doubled in size over the last eight years,” Petka-Zagajewska added. This indicates that more Poles are relying on mortgage financing to purchase homes, reflecting an increasing appetite for property ownership despite challenges such as inflationary pressures and fluctuating interest rates.

A critical factor influencing the housing market’s performance is the monetary policy stance of Poland’s central bank. Interest rates, which had been restrictive in previous years, are expected to stabilize at around 3.5%, creating a more predictable borrowing environment. As a result, demand for housing loans is likely to remain strong, further supporting market expansion.

PKO Bank Polski, Poland’s largest banking institution, continues to play a leading role in financing housing purchases. As of the end of 2023, the bank’s total assets reached PLN 501.5 billion, reinforcing its dominance in the mortgage lending sector. Since its listing on the Warsaw Stock Exchange (WSE) in November 2004, PKO Bank Polski has been an integral part of the WIG20 index, reflecting its importance in Poland’s financial landscape.

Looking ahead, the anticipated growth rate of 10% per year in 2026-2027 is expected to be driven by a combination of economic stability, improved mortgage conditions, and increasing housing demand. While challenges such as land availability, construction costs, and regulatory factors remain, the fundamental need for housing in Poland remains strong, ensuring continued expansion of the real estate sector.

As economic confidence improves and interest rates stabilize, Poland’s housing market is well-positioned for a robust period of growth, making it an attractive sector for both domestic and foreign investors in the coming years.

Source: ISBnews