Forecast for rising housing prices in Poland and Warsaw in the fourth quarter of 2023

According to the report of the Polish Economic Institute (Polskiego Instytutu Ekonomicznego (PIE) “Analysis of the housing market in the third quarter of 2023”, in the fourth quarter of 2023, the increase in housing prices in Poland will remain at least at the level of 9-10% (year-on-year, y/y).

According to the report of the Polish Economic Institute (Polskiego Instytutu Ekonomicznego (PIE) “Analysis of the housing market in the third quarter of 2023”, in the fourth quarter of 2023, the increase in housing prices in Poland will remain at least at the level of 9-10% (year-on-year, y/y).

In the fourth quarter of 2023, the trends observed in the third quarter of 2023 will continue to operate. The number of new housing offers will decrease due to the low activity of developers in the construction market and the long period of investment implementation. For the whole of 2022, the number of apartments whose construction began decreased by 27.8% (y/y), and from January to September of this year - by 15.7%.

Due to the fact that the average construction period for an apartment is 2 years (according to the General Statistical Office of Poland), this also means a decrease in the number of offers for sale in the fourth quarter of 2023. In the coming months, apartments will begin to appear on the market, construction of which began in 2022, provided that demand for housing purchases remains high. This means an increase in housing prices, at least at a level comparable to the current one (9-10% y/y).

The PIE Institute notes that the pace of house price growth accelerated in the third quarter of 2023. Housing prices among new offers increased by 9-10% y/y. In the second quarter, growth was 6% y/y. On average, home prices rise at a rate close to inflation. Prices increased most strongly in Krakow (14-19% y/y), reaching the level of 14-14.5 thousand zlotys per 1 m2. In Warsaw, the price increase was 14% y/y, and the price of 1 m2 on the primary market fluctuated around 15 thousand zlotys, and on the secondary market - around 16 thousand zlotys.

Demand for home purchases in Poland recovered significantly in the third quarter of 2023. This year there has been a large increase in mortgage applications. A total of 118.9 thousand applications were submitted in the third quarter, while a year ago there were only 40.1 thousand. This is an increase of more than 195 percent year on year.

The Credit Bureau (BIK) points out that one of the main reasons for the growth is the strong interest in the “Safe Loan 2%” program, which has been in effect since July 2023. In the third quarter, more than 60 thousand applications for participation in this program were submitted and 17.5 thousand loans were provided. The number of loans provided under the program accounted for 41% of all housing loans provided. At the same time, the average cost of applied for loans increased to 395 thousand zlotys - by 22% for the entire quarter, says the PIE report.