Poland: How Have Flat-Building Costs and Land Prices Changed?
In recent years, investment land prices have risen sharply, adding pressure to the economics of residential development. Since 2020, the costs of building new flats have also increased, driven by higher material prices, labour expenses, and financing conditions. Regulatory changes have played an additional role in shaping final sale prices. Adjustments such as the withdrawal of strict parking standards have helped limit potential cost growth, as analysts estimate that enforcing such requirements would have made each square metre of housing significantly more expensive.
Tomasz Kaleta, Managing Director of Sales and Marketing at Develia
Over the last few years, the costs of building flats in Poland have risen steadily, mainly due to inflation, rising land prices, construction materials and labour costs. Although the pace of growth is currently slowing down, key factors such as high prices of investment plots and raw materials remain unchanged. According to data from the Central Statistical Office (GUS), in the second quarter of 2025, the average cost of constructing 1 sq m of new residential building was PLN 6,973. This is less than at the beginning of the year, but still more than in the same period a year earlier.
In view of high construction costs and limited land supply, it is important to manage the investment process effectively. Two years ago, Develia Construction was established within our group, which is responsible for the implementation of 20-25 per cent of projects. This gives us better control over the costs and quality of our investments.
For development companies, the predictability of the regulatory environment is crucial, as it enables responsible investment planning. The proposal to introduce a standard of 1.5 parking spaces per flat in many locations, especially in the centres of large cities, where the availability of land and underground space is limited, could significantly increase construction costs and limit the number of new flats. Ultimately, it was abandoned, leaving the decision to local authorities, which will increase design flexibility and allow investments to be better adapted to local conditions.
Marek Straszak, Regional Construction Manager, Matexi Polska
In the last five years, housing construction costs have undergone two significant upheavals. First during the pandemic and then after the outbreak of the conflict in Ukraine. In both cases, the key factors were disruptions in material supply chains and limited availability of workers, which translated into a sharp increase in costs. From 2020 to mid-2025, the costs of building flats increased by a total of around 50 per cent.
Legal regulations are an additional factor influencing prices. Energy efficiency regulations require the use of increasingly better technical solutions, from high-quality window frames, through more advanced insulation, to heat recovery ventilation systems. From January 2026, a regulation on emergency shelters will also come into force. In practice, this means that the underground parts of buildings will have to be reinforced, which will require significantly more steel and concrete, and thus further increase costs.
It is worth noting that the withdrawal of the so-called parking standard from the amendment to the act was crucial for the economics of many projects, especially in central locations where available plots are small. The requirement to provide 1.5 parking spaces per flat would often force developers to design up to three storeys of underground garages. This solution would increase the cost of the investment by an additional 10-15 per cent, which would translate into even higher flat prices.
Witold Kikolski, member of the management board of MS Waryński Development S.A.
In recent years, the costs of building flats have fluctuated significantly. In 2021–2022, material prices rose by more than 30 per cent year-on-year, while in 2023 the market slowed down. Currently, we are seeing stabilisation and even slight declines in many categories. On the other hand, labour costs continue to rise by 8-10 per cent annually, which means that total investment expenditure is still slowly increasing, according to data from the Central Statistical Office (GUS) – by an average of about 3 per cent per year.
At the same time, investment land prices in large cities remain high, especially in Warsaw, where demand for good locations remains very strong. This means that the difference in production costs between projects implemented in Katowice and Warsaw, for example, is as high as several per cent.
Legal regulations are an additional factor affecting costs. The new development law and stricter energy efficiency requirements have increased investment expenditure by several per cent. However, the greatest burden was borne by the regulations on parking standards, which until recently required investors to provide up to 1.5 parking spaces per flat. This meant that additional floors of underground garages had to be built, which in practice could significantly increase the cost of the entire investment. We therefore welcomed the decision to abolish the rigid standard in August 2025 and transfer the competence to local authorities. This gives greater flexibility in design and allows us to offer customers more reasonable prices, especially in well-connected locations.
Piotr Dobrzyński, Head of Operations and Technical BPI Real Estate Poland - Builder
In the last five years, the costs of building flats, and thus of construction projects, have increased by about 30-50 per cent due to inflation. Labour and material production costs have increased due to higher energy costs. Not all materials have increased in price by the same amount; some, such as steel, polystyrene, mineral wool and wood, have seen a large speculative jump – up to 100 per cent during the pandemic and at the beginning of the conflict in Ukraine. Today, material prices are at fairly low levels due to a decline in demand. Nevertheless, the overall increase in the cost of building materials since 2020 has been around +40%.
As for the impact of new building regulations on flat prices, such as parking standards, due to lower demand for flats, it can be considered that this is not noticeable at the moment. Nevertheless, higher parking standards increase the total area of a building, and thus the non-saleable area, increasing the construction costs of the entire building. With a constant amount of usable floor space, i.e. the so-called PUM, this translates into an increase in the price per square metre of PUM. The amount of the increase depends on the project, but is usually a few or several percent. In special cases, related to the size of the plot, the increased standard could make a given investment unprofitable, as it would be necessary to build, for example, another underground storey, which could result in the investment not being profitable in a given location. Contrary to appearances, the sale price of a parking space in an underground car park does not usually cover the costs of its construction.
Renata Mc Cabe-Kudla, Country Manager at Grupo Lar Polska
Construction costs have risen significantly in recent years due to inflation and the increase in labour costs. Due to the shortage of investment land, its prices are rising every year. Since 2020, we have seen a greater increase in costs than in previous years, partly due to high inflation. New building regulations and the city's growing expectations regarding the infrastructure built by developers have a very significant impact on the increase in flat prices.
Damian Tomasik, President of the Management Board of Alter Investment
Over the last five years, construction costs have risen steadily, both in terms of materials and labour. The most dynamic growth was observed in 2021–2022, when the prices of steel, concrete and wood increased by as much as several dozen per cent year-on-year. Since 2023, the pace of increases has slowed, but costs are still higher than before the pandemic. At the same time, investment land has become more expensive, in large cities by as much as 40-50 per cent since 2020. New regulations, such as energy efficiency standards and environmental requirements, raise the entry threshold for developers, which naturally affects flat prices. If the provision on mandatory parking standards had been maintained, flats in many projects would have been up to 10-15 per cent more expensive.
Jakub Serek, Director of Construction Cost Planning at Archicom
Construction costs have changed very dynamically in recent years, with many factors influencing their level. Since 2020, we have seen a significant increase in both material prices and labour costs, especially during the pandemic and subsequent spikes in inflation. Currently, the situation is more stable, and the annual increase in costs is within the limits of inflation, which allows for more effective investment planning. However, it is not possible to talk about a single source of increases. In addition to material prices and wages, other important factors included local government obligations to develop infrastructure in the vicinity of housing estates, such as roads, recreational areas and public facilities.
In turn, changes in building regulations, often necessary from the perspective of quality and safety, also increase the costs of investment implementation. An example is the obligation to provide emergency shelters, which will come into force in 2026. Today, however, it is difficult to clearly assess its potential impact. It is therefore clear that the final price of a flat is the result of many overlapping factors, from the costs of land, labour and materials to legal regulations.
Source: dompress.pl
Photo: Develia - Vivre Wroclaw
