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Poland's residential property market has experienced dramatic price increases that far outpace salary growth, making it one of Europe's least affordable housing markets for first-time buyers.
As of September 2025, major Polish cities like Warsaw, Kraków, and Gdańsk are experiencing some of the fastest property price appreciation in Europe, with residential prices climbing 44% over five years while wages have struggled to keep pace. The combination of record-high mortgage rates, persistent housing shortages, and strong investor demand has created a perfect storm that's pricing out many local buyers while maintaining attractive rental yields for property investors.
If you want to go deeper, you can check our pack of documents related to the real estate market in Poland, based on reliable facts and data, not opinions or rumors.
Poland's property prices have surged 44% in five years while wages haven't kept pace, making housing increasingly unaffordable for locals.
Despite high prices, persistent housing shortages and strong rental yields continue to support the market fundamentals.
| Metric | Current Status | Outlook |
|---|---|---|
| Price Growth (5 years) | 44% increase | Stabilizing at 3-5% annually |
| Warsaw Price/m² | 16,782 PLN (€3,900) | Moderate growth expected |
| Mortgage Rates | 5.25-7.5% | Expected 100bp cut by late 2025 |
| Housing Supply Deficit | 80,000 units annually | Gradual improvement planned |
| Rental Yields | 4.0-6.5% | Remaining attractive |
| Affordability Ratio | 7-8 years of salary | Slight improvement expected |
| Foreign Investment | 30%+ in prime developments | Policy restrictions increasing |
How fast have residential property prices risen compared to salaries in the last five years?
Residential property prices in Poland's major cities have skyrocketed 44% over the past five years, significantly outpacing salary growth during the same period.
In 2025 alone, property prices surged over 14% year-on-year, while gross salaries increased at a much slower pace. This dramatic imbalance has created Poland's widest house price-to-income gap since the 2008 financial crisis.
Warsaw leads this price explosion, with property values rising faster than in Rome or Prague. Kraków and Gdańsk have experienced similarly dramatic increases, making these cities among Europe's fastest-appreciating housing markets. The gap between property price growth and wage increases has stretched household budgets to breaking point.
As of September 2025, the average Polish worker now needs approximately seven years of gross average salary to purchase a standard apartment in major cities. This ratio has remained relatively stable over time, but the absolute prices have reached unprecedented levels.
It's something we develop in our Poland property pack.
What are the current average prices per square meter in major Polish cities?
Property prices vary significantly across Poland's major cities, with Warsaw commanding the highest prices and smaller cities offering more affordable options.
| City | Average Price (PLN/m²) | Average Price (EUR/m²) |
|---|---|---|
| Warsaw (citywide) | 16,782 | ≈3,900 |
| Warsaw (center) | 22,515 | ≈5,200 |
| Kraków (center) | 15,000-20,100 | ≈3,500-4,700 |
| Gdańsk (citywide) | 13,000-16,200 | ≈3,000-3,700 |
| Wrocław | 14,000-16,000 | ≈3,100-3,600 |
New residential developments command a 5-15% premium over secondary market properties. Suburban districts typically offer 30-40% lower prices compared to city centers, providing more affordable options for budget-conscious buyers.
Warsaw's central districts have become particularly expensive, with prime locations reaching over 22,500 PLN per square meter. Kraków's historic center and Gdańsk's coastal areas command similar premium pricing for new construction projects.
How do current mortgage interest rates affect first-time buyer affordability?
Current mortgage interest rates in Poland are among the highest in Europe, severely impacting first-time buyer affordability.
As of September 2025, average mortgage rates range from 5.25-6.5% for variable rate loans and 6.0-7.5% for fixed-rate mortgages. These elevated rates have pushed monthly mortgage payments to levels that make homeownership unattainable for many young professionals and families.
First-time buyer affordability has reached its lowest point since 2008. The combination of high property prices and expensive borrowing costs means that many potential buyers are priced out of the market entirely. A typical first-time buyer in Warsaw needs to save half their net salary for five consecutive years just to accumulate the required 20% deposit for a 57-square-meter apartment.
However, the National Bank of Poland is expected to cut interest rates by approximately 100 basis points by late 2025. This anticipated reduction could provide some relief to prospective buyers, though it's unlikely to fully restore affordability to pre-2020 levels.
Banks have also tightened lending criteria, making it even more challenging for first-time buyers to qualify for mortgages despite having adequate incomes.
What percentage of household income do people spend on housing costs today?
Most Polish households now spend 30-40% of their monthly income on housing costs, with many exceeding recommended affordability thresholds.
Nearly 60% of Polish citizens report that their housing costs exceed 30% of their household budget, placing Poland among the highest in the European Union for housing cost burden. This represents a significant increase from previous years as property prices and rental costs have outpaced income growth.
The average cost overburden rate in Polish cities stands at 5.7% for households paying more than 40% of their income on housing. However, this figure significantly underestimates the actual pressure in major urban centers like Warsaw, Kraków, and Gdańsk, where housing costs consume an even larger share of household budgets.
Young professionals and families are particularly affected, with many forced to allocate 40-50% of their income to housing just to live in areas with good job opportunities. This high housing cost burden leaves little room for savings, investment, or other essential expenses.
The situation has worsened considerably since 2020, when housing costs typically represented 25-30% of household income in major cities.
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How many years of average salary are needed to buy a standard apartment?
Purchasing a standard apartment in Poland's major cities requires approximately 7-8 years of gross average salary, with Warsaw being the least affordable.
In Warsaw, a 70-square-meter apartment requires approximately 7-8 years of the gross average salary. Kraków and Gdańsk are slightly more affordable, requiring around 7 years of gross average salary for a similar-sized apartment.
This affordability ratio places Warsaw's housing market on par with expensive Western European cities, despite Poland's lower average wages. The city has become less affordable than Rome or Prague, representing a dramatic shift in Central European real estate dynamics.
For context, a first-time buyer in Warsaw earning the average salary would need to save approximately 50% of their net income for five consecutive years just to accumulate the 20% deposit required by most banks. This doesn't include the additional costs of legal fees, taxes, and moving expenses.
The situation becomes even more challenging when considering that many young professionals earn below the national average wage, extending the required saving period to 8-10 years or more.
Is housing supply keeping up with demand in Poland?
Poland faces a significant housing shortage, with new construction failing to meet growing demand across major cities.
Approximately 200,000 new homes were delivered in 2024, but the annual shortfall remains at least 80,000 units. Poland's overall housing deficit ranges between 1.5-2.2 million dwellings, representing one of Europe's most severe housing supply crunches.
Most new supply comes from private developers focused on higher-end segments, while social and public housing remains marginal. This market dynamic means that new construction primarily serves affluent buyers and investors rather than addressing the broader affordability crisis.
Developers are gradually shifting toward more affordable segments and energy-efficient buildings in response to market pressures and government incentives. However, this transition is happening slowly and hasn't yet meaningfully impacted overall supply levels.
The persistent supply shortage continues to support property prices despite affordability challenges, creating a structural imbalance that favors property owners and investors over prospective buyers.
It's something we develop in our Poland property pack.
What are the rental yields, and is buying more attractive than renting?
Polish cities offer attractive rental yields that make property investment appealing despite high purchase prices.
| City | Gross Rental Yield | Investment Attractiveness |
|---|---|---|
| Warsaw | 4.0-5.2% | Strong, stable demand |
| Kraków | 5.2-6.5% | Excellent for investors |
| Wrocław | 5.0-6.0% | Tech hub growth |
| Gdańsk | 5.5-6.5% | Coastal premium |
| Poland Average | 6.1% | Above EU average |
Buying remains attractive in cities with high yields and stable rental demand, particularly for investors with sufficient capital. The recent price surge has made renting the default option for many newcomers and young professionals who cannot afford to purchase.
Rental demand is projected to remain robust due to continued urbanization and the influx of foreign workers. Warsaw, Kraków, Wrocław, and the Tri-City area offer particularly strong buy-to-let opportunities for investors.
For owner-occupiers, the decision depends heavily on individual circumstances and timeline. Those planning to stay long-term may benefit from buying, while short-term residents or those without substantial savings are better served by renting.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Poland versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How does Poland's price-to-income ratio compare with other European countries?
Poland's price-to-income ratio of 10.9 years places it in the middle range among European Union countries, but major cities exceed this average significantly.
While Poland's national ratio appears moderate compared to Western European countries, major cities tell a different story. Warsaw's price-to-income ratio now exceeds Prague and rivals expensive Western European cities like Vienna or Berlin, highlighting rapid deterioration in affordability.
Polish cities remain nominally more affordable than established Western European markets, but this gap is closing rapidly. The rate of price appreciation in Polish cities significantly exceeds that of most other European markets, suggesting continued convergence toward Western European price levels.
This comparison is particularly concerning given Poland's lower average wages compared to Western Europe. Polish buyers face similar property prices to their Western counterparts while earning substantially less, creating an even more challenging affordability equation.
The rapid price convergence without corresponding wage growth makes Poland's major cities some of Europe's least affordable relative to local earning capacity.
How significant is foreign investment in driving up property prices?
Foreign investment plays a substantial role in Poland's property market, particularly in premium developments where foreign buyers account for over 30% of purchases.
Ukrainians and Belarusians represent the largest foreign buyer groups, with over 17,000 apartments purchased by foreign nationals in 2024. This foreign demand is concentrated in prime developments and new construction projects in major cities.
Investor demand in premium segments contributes to price pressure in major cities, particularly for new builds and luxury properties. Foreign buyers often purchase properties as investments rather than primary residences, adding to rental stock but also competing with local buyers.
The influx of foreign investment has created a two-tier market where international buyers compete for premium properties while local buyers are increasingly pushed toward lower-quality or peripheral locations.
Government policies are beginning to address this issue through stronger ownership restrictions and anti-speculation measures, though their full impact remains to be seen.
What government policies are currently influencing housing demand?
The Polish government has implemented several policies to address housing affordability while managing market demand.
The "Safe 2% Mortgage" program ended in 2024, but new initiatives like "First Keys" now subsidize secondary market purchases for first-home buyers with specific price caps per square meter. These programs aim to help young families access homeownership without further inflating new construction prices.
Social and public housing spending increased to 2.5-5 billion PLN in 2025, targeting up to 15,000 new subsidized units annually. This represents a significant increase in government commitment to affordable housing development.
Anti-speculation measures include stronger ownership and investor resale restrictions, with minimum 5-year holding periods for government-supported purchases. These policies aim to curb speculative flipping activity that artificially inflates prices.
The government has also introduced energy efficiency requirements and zoning reforms to encourage more sustainable development patterns and increase overall housing supply.
It's something we develop in our Poland property pack.
Are there signs of speculative buying or house-flipping driving up prices?
Speculative activity exists in Poland's property market, particularly in luxury segments and new developments, though it hasn't reached crisis levels.
Investor and speculative activity is most visible in premium and new-build properties, where short-term profit-seeking behavior contributes to price increases. However, this speculation remains contained within specific market segments rather than affecting the entire market.
The government has introduced anti-flipping policies including ownership holding periods and resale restrictions for government-supported purchases. These measures specifically target rapid property turnover that artificially inflates prices without adding real value.
Most speculative activity involves domestic investors and some foreign buyers who purchase properties with the intention of quick resale rather than long-term investment or occupation. This behavior is most common in Warsaw's premium districts and popular tourist areas.
New regulations requiring minimum 5-year holding periods for certain property purchases aim to discourage short-term speculation while preserving legitimate investment activity.
What do experts predict for Poland's housing market in the next 2-3 years?
Market experts anticipate stabilization and moderate growth for Poland's housing market through 2027, with several factors supporting this outlook.
Property price growth is expected to moderate to 3-5% annually starting in late 2025, particularly if interest rates fall as anticipated. This represents a significant slowdown from the explosive growth of recent years.
Prices will likely remain elevated in supply-constrained cities, but speculative surges should diminish due to policy changes and increased housing stock coming to market. The market is transitioning from rapid appreciation to more sustainable growth patterns.
Long-term fundamentals remain strong due to Poland's continued economic growth, ongoing urbanization, and persistent supply deficits. However, the widening affordability gap represents the greatest risk to sustained market growth.
Rental demand is projected to stay robust, making buy-to-let investments attractive in Warsaw, Kraków, Wrocław, and Tri-City areas. Foreign investment may moderate due to policy restrictions, but domestic investor activity should remain strong.
The anticipated interest rate cuts of 100 basis points by late 2025 could provide some relief to buyers, though full affordability recovery may take several years.
Conclusion
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.
Poland's property market reflects a classic supply-demand imbalance where strong fundamentals meet affordability constraints.
While prices appear overvalued relative to local incomes, persistent housing shortages and attractive rental yields continue to support property values for investors.
Sources
- Poland Price Forecasts - InvestRopa
- Poland Real Estate Market Analysis - InvestRopa
- Poland Insight - Average Apartment Prices
- Notes from Poland - Warsaw Price Comparison
- Global Property Guide - Poland Price History
- Polish Mortgage Market Update
- Euronews - European Housing Costs
- Cushman & Wakefield - Housing Sector Report
- Global Property Guide - Poland Rental Yields
- Finding Poland - Foreign Investment Data