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Poland's property market has experienced explosive growth in 2025, with prices surging by up to 14.4% year-over-year across major cities. The dramatic price increases are driven by a perfect storm of factors including high mortgage rates, severe housing shortages, strong internal migration, and rising foreign investment activity.
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Poland's property prices rose by 14.4% year-over-year as of September 2025, with Kraków leading at 28.1% growth in new builds. Major cities like Wrocław, Gdańsk, and the Tri-City area are experiencing double-digit price increases despite mortgage rates remaining high at 7.4-7.9%.
The surge is fueled by a housing deficit of 1.5-2.2 million units, strong internal migration to urban centers, rising construction costs, and growing foreign investor participation reaching 30% in select city-center projects.
| City | Annual Price Growth | Average Price per m² |
|---|---|---|
| Kraków | 28.1% | PLN 18,500 |
| Wrocław | 11.2% | PLN 14,800 |
| Gdańsk (Tri-City) | 11.4% | PLN 16,233 |
| Warsaw | 4-6% | PLN 22,500 |
| Gdynia | 10.8% | PLN 15,200 |
| Sopot | 12.1% | PLN 19,400 |
How fast have property prices in Poland been rising year over year?
Poland's residential property prices have experienced remarkable growth throughout 2025, with the national average increasing by 14.4% year-over-year as of September 2025.
This growth rate places Poland among the fastest-growing property markets in Europe, significantly outpacing most Western European countries. The primary market, which includes new construction projects, has shown slightly more moderate but still substantial growth of 4-11% depending on the specific city and project type.
The price acceleration began in late 2024 and has maintained momentum throughout 2025, driven by fundamental supply-demand imbalances and economic factors. Different property segments have shown varying growth rates, with luxury developments in city centers often experiencing the highest appreciation.
For perspective, this 14.4% annual growth represents one of the most significant property price increases Poland has seen in recent decades. The growth has been consistent across multiple quarters, indicating this is not a short-term spike but rather a sustained market trend.
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Which cities or regions in Poland are seeing the sharpest price increases?
Kraków leads Poland's property price surge with an extraordinary 28.1% year-over-year increase in new builds as of early 2025, making it the fastest-growing major Polish real estate market.
The Tri-City area, encompassing Gdańsk, Gdynia, and Sopot, has recorded impressive growth rates of 11.4%, with Gdańsk's central districts reaching approximately PLN 16,233 per square meter. Sopot, known for its seaside location, has seen prices climb to PLN 19,400 per square meter with 12.1% annual growth.
Wrocław follows closely with 11.2% annual growth, establishing itself as a major investment hotspot in southwestern Poland. The city's technology sector growth and university presence continue to drive housing demand, pushing average prices to PLN 14,800 per square meter.
Warsaw, despite being Poland's most expensive market at PLN 22,500 per square meter, has shown more modest growth of 4-6% annually. Some central Warsaw districts have even experienced slight price declines as the market reaches saturation points and affordability becomes a significant constraint.
Secondary cities like Poznań, Łódź, and Lublin have also recorded solid growth rates between 8-12%, though they remain more affordable entry points for both investors and residents.
What's happening with mortgage interest rates in Poland and how is that affecting demand?
Mortgage interest rates in Poland currently range between 7.37% and 7.9% as of September 2025, representing a slight decline from the peaks reached in 2024 but still remaining at elevated levels.
These high rates have significantly impacted affordability, with monthly mortgage payments increasing substantially compared to the low-rate environment of previous years. Banks have implemented stricter lending criteria, requiring higher income verification and larger down payments to qualify for loans.
Variable-rate mortgages remain the dominant product in Poland, with rates typically tied to the WIBOR (Warsaw Interbank Offered Rate) plus a bank margin. This structure means borrowers face continued uncertainty as central bank policy evolves.
Despite high rates, demand has remained resilient in major cities, though it has cooled in some peripheral markets and among price-sensitive buyer segments. Many buyers are adopting wait-and-see approaches, expecting rates to decline further in 2026.
The combination of high mortgage rates and rapidly rising property prices has created a challenging affordability environment, particularly affecting first-time buyers and middle-income households seeking to enter the market.
How does the average income growth compare to property price growth in Poland?
Property price growth in Poland has significantly outpaced wage increases across all major cities, creating a widening affordability gap for local buyers.
While average incomes in Poland have grown by approximately 8-10% annually in major urban centers, property prices have surged by 14.4% nationally, with some cities like Kraków experiencing 28.1% growth. This disparity means that property ownership is becoming increasingly challenging for average-income Polish workers.
In Warsaw, the affordability crisis is most pronounced, with saving for a standard apartment deposit now requiring approximately five years when setting aside half of the average salary. This represents a significant deterioration from previous years when the same goal could be achieved in 3-4 years.
The income-to-property-price ratio has worsened in all major Polish cities, with Kraków and Warsaw showing the most dramatic deterioration. Young professionals and middle-income families are being priced out of central locations, driving demand toward suburban areas and smaller cities.
This trend has created opportunities for investors while simultaneously highlighting the need for increased housing supply and potentially supportive government policies to address affordability concerns for local residents.
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Are foreign investors playing a bigger role in Poland's property market recently?
Foreign investor participation in Poland's property market has increased dramatically, now accounting for 30% or more of purchases in select city-center projects, particularly in Warsaw and Kraków.
This represents a significant increase from previous years when foreign buyers typically comprised 15-20% of transactions in prime locations. EU investors, particularly from Germany, the Netherlands, and Scandinavian countries, lead this trend, attracted by Poland's relatively affordable prices compared to their home markets.
Non-EU investors have also increased their presence, with buyers from the UK, United States, and various Asian countries viewing Poland as an attractive European entry point. These investors are particularly drawn to Poland's strong rental yields and economic stability within the EU framework.
Foreign investment is concentrated in premium developments in city centers, luxury residential projects, and properties with strong rental potential near universities and business districts. This concentration has contributed to price pressure in these specific segments.
The trend reflects Poland's growing reputation as a stable, high-yield European real estate market, though it has also contributed to affordability challenges for local buyers in prime urban locations.
What's the current level of housing supply versus demand across major Polish cities?
Poland faces a severe nationwide housing deficit estimated between 1.5 and 2.2 million units, creating fundamental supply-demand imbalances driving current price increases.
| City | Annual Demand (Units) | Annual Supply (New Completions) | Supply Deficit |
|---|---|---|---|
| Warsaw | 25,000-30,000 | 18,000-22,000 | 3,000-12,000 |
| Kraków | 15,000-18,000 | 10,000-13,000 | 2,000-8,000 |
| Wrocław | 12,000-15,000 | 8,000-11,000 | 1,000-7,000 |
| Gdańsk | 8,000-10,000 | 5,000-7,000 | 1,000-5,000 |
| Poznań | 10,000-12,000 | 7,000-9,000 | 1,000-5,000 |
Despite increased construction activity across all major cities, annual new completions consistently lag behind buyer demand and the accumulated backlog from previous years. This structural undersupply creates continuous upward pressure on prices.
The supply shortage is most acute in city centers and well-connected suburban areas, where land availability is limited and development costs are highest. Developers face challenges including lengthy permitting processes, labor shortages, and rising material costs.
It's something we develop in our Poland property pack.
How much have construction costs and material prices gone up in Poland?
Construction and material costs in Poland have risen significantly throughout 2025, adding substantial pressure on developers and contributing directly to higher property prices for end buyers.
Steel prices have increased by approximately 15-20% year-over-year, while concrete and cement costs have risen by 12-18%. Lumber and finishing materials have seen price increases ranging from 10-25%, depending on the specific product and supply chain factors.
Labor costs represent another major factor, with skilled construction workers commanding 20-30% higher wages than in 2024 due to labor shortages and increased demand. Specialized trades like electrical work, plumbing, and HVAC installation have seen even steeper wage increases.
Energy costs for construction activities have also contributed to overall cost inflation, with fuel and electricity prices affecting both material production and construction site operations. Transportation costs for materials have increased due to higher fuel prices and supply chain disruptions.
These cost increases are being passed directly to property buyers, as developers maintain profit margins by adjusting sale prices. The result is a feedback loop where construction cost inflation drives property price inflation, further exacerbating affordability challenges.
Is Poland experiencing a population increase or internal migration that's fueling housing demand?
While Poland's overall population remains relatively stable, large-scale internal migration from rural areas and smaller towns to major cities is creating intense housing demand in urban centers.
Warsaw continues to attract approximately 40,000-50,000 new residents annually through internal migration, driven by employment opportunities in finance, technology, and services sectors. Young professionals aged 25-35 represent the largest segment of this migration flow.
Kraków has experienced similar migration patterns, with an estimated 25,000-30,000 new residents per year, many drawn by the city's growing technology sector and educational institutions. The city's university population also contributes significantly to rental housing demand.
Wrocław and the Tri-City area have each gained 15,000-20,000 new residents annually through internal migration, attracted by economic opportunities and quality of life factors. These cities benefit from their strategic locations and growing business sectors.
This internal migration pattern concentrates housing demand in already supply-constrained markets, creating additional pressure on property prices and rental markets. Rural-to-urban migration shows no signs of slowing, ensuring continued demand pressure in major cities.
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 many new housing units are being built each year compared to the number of buyers?
Poland's construction sector is delivering robust volumes of new housing units across major cities, yet annual completions still fall short of total buyer demand and the accumulated housing backlog.
Nationally, Poland completes approximately 200,000-250,000 new housing units annually, including both private developments and social housing projects. However, this supply faces demand from both domestic buyers and growing foreign investor interest, creating ongoing shortage conditions.
In Warsaw alone, developers complete 18,000-22,000 new units annually, but face demand for 25,000-30,000 units from various buyer categories including first-time buyers, upgraders, investors, and new residents. This consistent deficit maintains upward price pressure.
Construction pipelines show strong activity with building permits issued for substantial future supply, but completion timelines typically extend 18-36 months from permit to delivery. This lag means current demand must compete for existing limited inventory.
The buyer-to-supply ratio varies significantly by location and price segment, with luxury city-center projects often selling out during pre-construction phases, while peripheral developments may have more balanced supply-demand dynamics.
Are government policies, subsidies, or tax incentives pushing up real estate demand?
Government policies in Poland provide limited direct subsidies or incentives for real estate purchases, with most support focused on specific first-time buyer programs rather than broad market stimulation.
The primary government support mechanism is a zero-deposit loan program for first-time buyers, though this comes with strict price limits and income requirements that limit its overall market impact. Eligible properties must fall below specific price thresholds that exclude most prime urban locations.
Poland's tax policies remain relatively neutral compared to other European markets, without significant investment incentives or tax breaks that would artificially inflate demand. Property transfer taxes and annual property taxes are moderate and don't create major market distortions.
Regional development programs occasionally provide infrastructure investments that enhance property values in specific areas, but these represent indirect rather than direct demand drivers. EU funding for infrastructure projects can improve connectivity and attractiveness of certain locations.
Overall, government policies are not a primary driver of current price increases, with market fundamentals like supply shortages, migration patterns, and investor interest playing much larger roles in driving demand and price appreciation.
How do rental yields in Poland compare to other European countries right now?
Rental yields in Poland's major cities rank among the highest in Central and Eastern Europe, significantly outperforming most Western European markets and attracting substantial investor interest.
Warsaw offers gross rental yields of 5.5-6.5% for well-located residential properties, substantially higher than Berlin (3.5-4.0%), Paris (3.0-3.5%), or London (3.5-4.5%). These yields reflect both reasonable purchase prices relative to rental income potential and strong rental demand.
Kraków delivers even stronger yields of 6.0-7.0% gross, driven by high rental demand from students, young professionals, and internal migrants. The city's growing technology sector ensures steady demand for quality rental accommodation.
Wrocław and Gdańsk offer similar yield ranges of 5.5-6.5%, benefiting from economic growth, university populations, and limited rental supply. These yields compare favorably to Prague (4.5-5.5%) and Budapest (5.0-6.0%).
High rental demand from internal migrants, foreign students, and young professionals supports these yields, while limited new rental supply construction maintains rental rate growth potential. The combination of yield and capital appreciation potential makes Poland attractive to European property investors.
It's something we develop in our Poland property pack.
What role is inflation and the overall economic situation in Poland playing in rising property prices?
High inflation in 2023-2024 contributed significantly to rapid property price growth as investors sought real assets as inflation hedges, though inflation has moderated in 2025 while price momentum continues.
Poland's inflation rate peaked at over 17% in 2022-2023 before declining to more manageable levels around 5-7% in 2025. During the high inflation period, property became a preferred store of value, driving substantial investor demand and price appreciation.
The Polish economy has demonstrated resilience with GDP growth of 2.5-3.5% in 2025, supporting employment levels and wage growth that sustain housing demand. Poland's EU membership and strategic location continue to attract business investment and economic development.
Central bank monetary policy aimed at controlling inflation has kept interest rates elevated, affecting mortgage affordability but also indicating economic stability and anti-inflation commitment. The balance between growth and inflation control influences both property demand and pricing.
Economic fundamentals including low unemployment (around 5.5%), growing wages in urban centers, and continued EU integration support underlying property demand beyond pure inflation-hedging motives. The economy's structural strengths provide confidence for long-term property investment.
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 presents both significant opportunities and challenges as we move through 2025.
While price growth of 14.4% nationally creates wealth-building potential for investors, affordability concerns for local buyers highlight the market's complexity and the importance of thorough research before making investment decisions.
Sources
- Global Property Guide - Poland Price History
- InvestRopa - Poland Price Forecasts
- Mortgage Blog Poland - Market Update 2025
- The Global Economy - Poland Mortgage Rates
- Deloitte Property Index
- Global Property Guide - Poland Mortgage Rates
- National Bank of Poland - Real Estate Market Report
- Statista - Poland Housing Cost Changes