Looking to rent an apartment in Poland? Be prepared for high costs. Last year, rents rose by nearly 18%. In the five largest cities of Warsaw, Krakow, Wroclaw, Poznan and Gdansk, the increase was even higher, at 30-40%. A two-bedroom apartment of 45 square metres in a major Polish city costs €800 per month, while the average income over the same period is €1,050.
Prices were already rising rapidly before the war in Ukraine, but when more than a million Ukrainian refugees arrived in Poland, the housing market became even more difficult. Inflation, fuelled by the energy crisis, is making matters worse.
The roots go back to the housing shortage of the communist era, but even after the fall of communism, no government has built enough social housing. The effects are still felt today: according to Eurostat, Poland has the lowest number of rooms per person in the European Union (just 1.1). At the same time, Polish families are the most numerous (2.8 people on average per family).
There are no signs that the situation will improve. The recent construction boom helped to alleviate the housing market deficit, but it wasn’t enough. Last year, the Central Bank raised interest rates due to inflation, making credit expensive and difficult to access.
This had a massive knock-on effect: mortgage applications fell by 63% in 2022. Investment is also slowing down: developers are building less and less, affected by the skyrocketing interest rates. Only if inflation falls will there be a rate cut, but the market has already changed. Now the Poles are not only stuck in literal tight rooms, but there isn’t really a way out for the housing market in sight.
