Buying real estate in Poland?

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Is it a good time to buy a property in Poland in 2024?

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Are you thinking of investing in property in Poland? Are you unsure when would be the best time to proceed?

Market timing is a topic where everyone has their own ideas. The Polish real estate agent you know might advise you that now is the perfect time to buy property, while your childhood friend from Warsaw may suggest exercising more patience before making a decision.

At Investropa, when we create articles or update our pack of documents related to the real estate market in Poland, we base our work on facts and data we can trust, not opinions or rumors.

After thoroughly analyzing official reports and statistics available on government websites, we have gathered solid information in a database. Here are our findings that can assist you in determining whether it's the right time to invest in real estate in Poland.

Enjoy the article!

How is the property market in Poland these days?

Poland offers, today, a lot of stability to investors


Stability is a necessary condition when investing in real estate because it safeguards against market fluctuations and uncertainties. It is an information you need as a foreigner looking to buy a property in Poland.

You probably know it already, Poland is very stable. The last Fragile State Index reported for this country is 42.2, which is an outstanding number.

Poland has a stable political and economic environment, with a strong commitment to reforms and the rule of law, which helps create an attractive investment environment. Furthermore, the country has a strong track record of economic growth and low inflation, making it an attractive option for investors looking for stability.

Next, let's assess the economic projections.

Poland will see substantial development


Second thing to do before buying a property: make sure the country's economy is thriving.

According to the IMF, Poland is likely to finish 2023 with a growth rate of 0.3%, which is somewhat disappointing. For 2024, the figure we're looking at is 2.4%.

However, this modest figure is only temporary, as Poland's economy is expected to increase by 11.2% during the next 5 years, resulting in an average GDP growth rate of 2.2%.

The expected sustainable growth rate in Poland means that the economy is growing steadily and the real estate market is expected to remain strong. This makes it a great opportunity for investors to purchase real estate in Poland as the potential for appreciation is high.

However, GDP growth is not the only metric to look at.Poland gdp growth

Polish business owners don't have faith in the economy


GDP growth is great, but it may not fully capture the diverse expectations of businesses in the Polish property market. Luckily, in Poland there exists an official metric that is consistently published. It's not the case for every country, so we're lucky.

By conducting surveys and assessments of business leaders, the Business Consumer Index (BCI) is formulated as a metric to measure their confidence in the present and future economic conditions.

According to the Central Statistical Office of Poland (GUS)'s data, the latest Business Confidence Index value is -15 for Poland.

As we will see below, interest rates skyrocketed to more than 7% at the beginning of 2023, squeezing borrowers as 90% of loans to households and businesses are variable. Also, Poland's currency, the zloty, is weak, benefiting exporters but making imports costlier for producers.

This is not new, business operators were not confident 12 months ago either. The BCI score, back then, was at -11.

A lack of confidence among local businesses in Poland may lead to a subdued property market. Economic uncertainty can dampen investment and growth in the real estate sector. Buyers may find fewer property options, limited appreciation potential, and potentially face challenges in securing financing due to cautious lending practices.

Nevertheless, it is important to acknowledge that this "sentiment" alone has no direct impact on growth. There have been countless times of negative BCI followed by growth. That's why we must look at more data points.


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Poland is dispensing less building permits


If you're thinking of investing in property in a country, it's advisable to consider the number of permits authorized for property development. When there is a rise in the number of building permits being delivered, it indicates that the property market is growing and moving in a positive direction.

Unfortunately, the number of building permits issued is declining in Poland.

Within the past year, according to Central Statistical Office of Poland (GUS), the number of building permits granted by Polish local institutions fell by 20.2%, from 784,753 to 626,458 units.

Without a doubt, this is a discouraging signal. Let's analyze more data.

But before that, keep in mind that if there is a reduction in building permits, it will result in a diminished supply of real estate. Consequently, there is a higher chance of property prices increasing in Poland in 2024.

Property prices keep increasing in Poland


Poland's home prices have increased by 57.3% in 5 years according to eurostat.

It means that if you had bought a flat in Warsaw for $400,000 five years ago, then it would now be worth around $629,000.

In recent times, the Polish property market has exhibited relentless and accelerating growth. Property values have consistently risen, and market dynamics have intensified.

It's a good sign if you're thinking of buying a property in Poland. The market is lively and getting stronger. However, it might be a good idea to wait for prices to go down before making your investment. That way, you can get a better deal.

You can find a more detailed analysis of the real estate prices in our property pack for Poland.Poland housing prices real estate

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Poland's population is getting a lot richer


When you're looking to buy real estate, population growth and GDP per capita deserve careful consideration because:

  • a growing population means more people needing homes
  • a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)

In Poland, the average GDP per capita has changed by 15.9% over the last 5 years. It ranks the country in the top 10 for the growth of this indicator.

This means that, if you purchase a stylish apartment in Warsaw and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.

If you're considering purchasing and renting it out, this trend is a good thing. Then, the demand for rentals is predicted to increase in cities like Warsaw or Kraków in 2024.

Rental yields are average in Poland


Rental yield is a common measure in real estate investing.

It shows you the percentage return you can expect from renting out the property.

According to Numbeo, rental properties in Poland offer gross rental yields ranging from 2.4% and 5.1%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Poland.

It means that your income potential is relatively moderate.

As we noted earlier, there is a chance that housing prices may go up due to a shortage of available homes (less building permits). Nonetheless, there will be a lot more of wealthy tenants seeking rental properties. Then, rental yields will probably remain at the same level in Poland in 2024.

Poland rental yields

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In Poland, inflation will intensify


In two words, inflation is when prices rise.

It's when your customary plate of pierogi costs 20 Polish złoty instead of 18 Polish złoty a couple of years ago.

If you're considering investing in a property, high inflation can bring you several advantages:

  • Property values tend to increase over time, leading to potential capital appreciation.
  • Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
  • Inflation reduces the real value of debt, making mortgage payments more affordable.
  • Real estate can act as a hedge against inflation, preserving the value of the investment.
  • Diversifying into real estate provides stability during inflationary periods.

According to the IMF, over the next 5 years, Poland will have an inflation rate of 21.5%, which gives us an average yearly increase of 4.3%.

This data is suggesting that Poland could experience inflation, resulting in rising prices. Therefore, it's worth considering buying property now as a potential opportunity.

Is it a good time to buy real estate in Poland then?

Time to conclude !

Undoubtedly, 2024 presents a compelling opportunity for property investment in Poland, driven by a range of favorable signals that indicate a conducive environment for real estate endeavors. The current stability Poland offers to investors provides a strong foundation for property ownership. This stability assures investors of a secure environment for their investments and minimizes potential risks.

The anticipation of substantial development in Poland adds to the attractiveness of property investment. As the country progresses with development initiatives, there is a likelihood of increased demand for housing and properties, potentially leading to capital appreciation over time.

Continuously increasing property prices underscore the potential for value appreciation, further enhancing the argument for property investment. Rising property prices can provide investors with opportunities for capital gains, making real estate a lucrative asset class.

The improving financial status of Poland's population contributes to the positive investment landscape. As the population's prosperity grows, the demand for housing and real estate is likely to increase, creating opportunities for both capital appreciation and rental income.

While the average rental yields might not be exceptional, the combination of stability, development prospects, rising property prices, improving population prosperity, and the anticipated intensification of inflation makes 2024 a strong year to consider property investment in Poland, despite some neutral and negative signals.

We hope this article has been helpful!. If you need to know more, you can check our our pack of documents related to the real estate market in Poland.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

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