Residential demand and prices stabilise in Q3 2024

The Polish economy has rebounded from a period of stagnation in 2023, creating favourable conditions for further growth in the residential market. According to Moody’s, Poland’s GDP is projected to expand by 3.1% in 2024 and 3.6% in 2025. While demand for flats remains driven by rising salaries and a stabilising economy, high inflation and elevated interest rates have led to a decline in mortgage enquiries.

Cushman & Wakefield notes that offer prices continued to trend upwards on both the primary and secondary markets in the third quarter of 2024. Prices for new-build flats rose by 10% year-on-year, with the strongest gains recorded in Łódź (+20%) and Wrocław (+13%). The stabilisation of price growth during the July-September period suggests that the impact of the “2% Safe Mortgage” programme, which previously drove demand, has waned.

The first three quarters of 2024 saw a 46% year-on-year increase in new flat starts and a 25% rise compared to the same period in 2022. Consequently, 2024 is likely to record the second-highest number of build-to-sell and build-to-rent starts, surpassed only by 2021. According to data from otodom, developers listed 12,000 flats for sale in Poland’s largest markets during the third quarter of 2024, with sales reaching 9,000 – unchanged from the previous quarter. This indicates that there is still demand for flats which is likely to be driven by rising salaries and low unemployment. Prospective buyers primarily include individuals investing their savings in residential properties and purchasing homes for owner-occupation. At the end of the third quarter, more than 50,000 flats were available on the primary market, showing an upward trend. Given current sales levels, this is expected to slow the pace of property price growth.

The residential rental market in Poland remains fragmented and dynamic, with many new listings entering the market. In the third quarter of 2024, rents across the six largest markets rose by an average of 4% quarter-on-quarter, with the highest growth recorded in Gdańsk (6%) and the lowest in Kraków and Warsaw (3% each). However, Kraków and Warsaw have reported the strongest five-year rental growth at 50% and 49% respectively. The median rent for studios, regardless of flat standard or building age and excluding service charges and utilities, is PLN 2,300 per month in Kraków and PLN 2,600 in Warsaw. Monthly rents for 1-bedroom flats stand at PLN 3,000 in Kraków and PLN 3,500 in Warsaw, plus service charges, while rents for 2-bedroom flats are PLN 3,900 in Kraków and PLN 5,000 in Warsaw. These figures represent medians, meaning the set of asking rents is divided into two equal halves.

MEDIAN ASKING RENTS

(EXCLUDING SERVICE CHARGES AND UTILITY COSTS, Q3 2024)

At the end of October 2024, the housing stock of institutional landlords in Poland’s largest cities comprised approximately 18,000 flats, excluding units put up for sale to individual buyers. Additionally, there were more than 11,000 flats under construction in PRS projects. Warsaw remains the most active market, with over 7,500 operating units and another 9,500 in the pipeline.

The number of operating rental flats is expected to grow steadily, as investors are securing more land for new projects. All operating PRS projects enjoy very high occupancy levels and continue to experience rental growth.

To read the full report “Poland Marketbeat Residential Q3 2024”, please visit the website of Cushman & Wakefield.