A shift in monetary policy across Europe is expected to support a recovery in real estate investment activity in the second half of 2025. The European Central Bank (ECB) has implemented a series of interest rate cuts, bringing the eurozone’s refinancing rate to 2.15 percent. Analysts anticipate another reduction by autumn, potentially lowering the rate to 1.75 percent (European Central Bank, June 2025). This easing of monetary policy, coupled with similar moves in Poland and Central and Eastern Europe (CEE), is improving financing conditions and enhancing real estate’s competitiveness as an investment asset class. In Poland, the National Bank of Poland reduced its reference rate from 5.75 percent to 5.00 percent over two meetings in May and July 2025. According to the Monetary Policy Council (RPP), further cuts are likely this year. Economists at Pekao SA and mBank project the rate could drop to 4.5 percent by year-end, and possibly to 3.5 percent by the close of 2026, supported by stable inflation and a projected GDP growth rate of 3.4 percent in 2025 (NBP, July 2025; Eurostat, Q2 2025). Preliminary data from Q2 2025 indicate that lower borrowing costs have already led to increased investment volumes in both the eurozone and Poland. Poland saw a marked uptick in transactions compared to Q1 2025, although the average deal size has remained modest. The market has responded with more transactions in core segments such as logistics and warehousing, where capitalization rates have held steady at 6.25–6.50 percent, according to figures reported by JLL and Cushman & Wakefield Poland. Investor focus remains selective. Core, long-term income-generating assets continue to attract the most interest, but there is growing activity around value-add opportunities and assets with redevelopment potential. Retail parks remain a key focus in the retail sector, with yields averaging 7–8 percent, particularly in regional cities and suburban zones (CBRE Poland, Mid-Year 2025 Outlook). Despite this momentum, activity in office and traditional retail sectors remains cautious. Price expectations between buyers and sellers continue to diverge, limiting larger-scale office acquisitions. Institutional investors, especially in Western Europe, have remained largely inactive as they continue to assess portfolio revaluations. However, with falling interest rates lowering the relative returns on government bonds and term deposits, real estate may once again appeal to conservative investors seeking yield. Capital sources are also evolving. Nearly 40 percent of real estate investment activity in Poland during H1 2025 came from CEE-based investors, while U.S. capital accounted for approximately 30 percent, and Western European sources added another 20 percent. Polish domestic investors represented over 14 percent of total volume, indicating growing domestic appetite and liquidity (Avison Young, Regional Office Market Report H1 2025). As interest rates decline further, the gap between seller expectations and buyer willingness may narrow, facilitating more large-scale deals. Additionally, lower borrowing costs could support the launch of new development projects, although political and geopolitical uncertainties, including regulatory shifts and regional security concerns, may continue to weigh on investor confidence. Nonetheless, market analysts expect a measurable rebound in transaction activity in Poland’s commercial real estate sector during the second half of 2025, driven by a more favorable interest rate environment and improving economic indicators across the CEE region.