Residential market in Poland – Q1 2022

Negative factors related to the situation in Ukraine and a rapidly rising inflation have significantly affected property buyers' sentiments and decisions. The number of flats sold in Q1 2022 on the primary market in Warsaw, Krakow, Wrocław, Tri-City, Poznań and Łódź amounted to 10,400. In comparison to the exceptionally high result in Q1 2021, the drop in sales in these six cities amounted to 46% YoY.

New supply in Poland also saw declines, but these were far smaller than the shift in sales. In Q1 2022, developers launched 13,500 units for sale – 7% less compared to the previous quarter and 3% less YoY.

With supply out stripping demand the six markets increased their offer to approximately 40,300 units. However, it did not stop the price increase. Over the last three months, the largest increases in average unit prices on offer were recorded in the Tri-City (over 7%), Łódź (6%) and Poznań (5.5%). The lowest quarterly growth was recorded in Wrocław with just over 1%.

The current demand in the housing market is marked by a number of rapidly changing factors: changes in interest rates, conditions in the rental market, mortgage-related adjustments, rising inflation and other volatile factors affecting buyer sentiment.

The changes taking place in the mortgage market are yet another very strong factor affecting sales. Successive increases in interest rates by the Polish Central Bank have rapidly translated into rate rises on loans offered to new borrowers. Additionally, another aspect that strongly reduces one’s credit rating is the need to add five percentage points to the interest rate when calculating the maximum loan amount, which stems from the “S Recommendation” Amendment. According to Kazimierz Kirejczyk, "This requirement will translate into a further significant drop in demand starting from Q2 2022.

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More on the key factors affecting the situation on the Polish housing market in Q1 2022 in the latest report.