The gradual improvement in the housing market in Poland

Nov. 29, 2015

The gradual improvement in the housing market in Poland

Polish housing market is slowly recovering - with record-low interest rates on mortgage loans and new housing programs stimulating demand.
The average price on the secondary housing market in the seven major cities of Poland (Warsaw, Gdansk, Gdynia, Krakow, Lodz, Poznan and Wroclaw) rose up to 3% (4.3% adjusted for inflation) over the past year. Average price increases in Gdansk was the highest - 13.1% up to € 1 289 per square meter. m., followed by Krakow with 8.1% growth to € 1 474 per square meter. In Warsaw the average price of housing decreased by 1.6% to € 1 678 per square meter. Lodz and Poznan have price declining of 3.5% and 2.1% respectively. Average cost of homes in Lodz is € 795 per square meter and € 1167 per square meter in Poznan.

Until mid-2008, a substantial reduction in prices in the housing market in Poland was not observed - the inflow of foreign investment after joining the EU, record low interest rates, as well as the development of mortgage financing - all this from 2004 to 2007 provided the Polish market stable growth, the annual increase in prices housing (eg, from 2005 to 2008, the rise in prices in Warsaw was 23%, 28%, 25% and 13%, respectively). A similar situation was observed in other cities.

However, during the 2008-09 crisis, the devaluation of the Polish zloty and the crisis of the mortgage market (the majority of loans in foreign currency could not be paid by buyers) influenced housing prices to fall, and the fall continued for 6 years. 2015 was the first year of growth after six years of decline.

Experts say the Polish market has also a positive trend in the commercial real estate market: for the first time since 2011 has significantly decreased the percentage of vacant office space in Warsaw and at the end of the 3rd quarter of 2015 the total amount of leased premises amounted to 222 thousand sq. m., which is 36% higher than the same period of 2014. It is expected that by the end of 2015 the total volume of transactions in the market rent of commercial premises in the Polish capital will reach 800 000 sq. m, and this will be an absolute record for the Warsaw market.
Rents for commercial real estate market in the third quarter were comparable to the private housing market rates - in the central areas from € 22 to € 24/ sqm/month, and from € 16 to € 18/sqm/month in the sleeping areas.

According to the materials and
Photocredit and