Housing prices in 2025 - here's what will happen to the real estate market

What will the housing market in Poland look like in the coming months?

Table of contents

1. NBP may ease monetary policy

2. What about the demand for mortgage loans?

3. What is stopping the decline in housing prices?

PKO analysts discussed the economic factors that have a decisive impact on housing prices and their possible changes. They also provided factors that inhibit both the upward and downward trends in housing prices.

NBP may ease monetary policy.

In the analysis, PKO forecasts an increase in Poland's real GDP by 3.5% year-on-year and a weakening increase in consumption, which is influenced by the decreasing wage dynamics. Analysts emphasize that in previous years, wage growth was primarily driven by increases in the minimum wage.

However, in the context of the housing market, this was of marginal importance, because the lowest earners do not constitute a significant demand force. The increases in the minimum wage had a much greater impact on the growth of real estate prices due to the fact that they increased the total cost of construction.

On the other hand, the more lenient monetary policy of the National Bank of Poland may provide significant support for the demand force. The mechanism in this case is simple: even if interest rates in real terms are still high compared to the situation in previous years, their reduction may result in a moderate drop in prices. In general, however, the housing market will see a stabilization of the annual dynamics of average transaction prices around zero.

What about the demand for mortgage loans?

In the fourth quarter of 2024, the criteria for granting them did not change significantly. Banks noted a weaker demand for loans, which was closely related to the deteriorating economic situation of households and the more frequent use of alternative sources of financing.

The first quarter of 2025 should not bring any significant changes in this matter. Credit policy will most likely operate according to the current rules, which is why a further decline in demand for housing loans is expected.

What is stopping the decline in housing prices?

According to PKO BP analysts, the following factors may have an impact on limiting the downward trend in the case of apartment prices:

• reduction in the offer of apartments introduced to the market;

• possible turbulence on the land market;

• increase in the prices of building materials in the event of full launch of projects co-financed by the KPO;

• increase in energy prices and service prices;

• costs of amending technical conditions, including requirements for playgrounds, mandatory rooms for common use and greater minimum distances from the boundaries of the plot.

In turn, the upward trends observed in recent quarters are inhibited by factors such as:

• unclear prospects for interest rate cuts by the NBP;

• lack of regulatory support for the purchase of an apartment - the new housing program prepared by the government is at the initial concept stage;

• record oversupply on the primary and secondary markets;

• stabilization of rental rates, which weakens the motivation for investment purchases.

The report points out that drops in apartment prices are most likely in the case of unsuccessful architectural solutions and the least attractive locations. An example was given of the areas in the Odra River basin, which were affected by extensive flooding in September 2024. "Negative experiences of living in flood areas, as well as the risk of resettlement from the area of ​​future flood protection investments, may lead to decisions to change the place of residence and sell real estate."