Commentary by Grzegorz Sielewicz, Chief Economist at Colliers, translated from Polish.

The year 2025 brought stabilization to the market. Asking prices have leveled off, and in the case of transaction prices, even declines have been recorded. This is the result of lower market liquidity caused mainly by the still high cost of mortgage loans. However, with improving economic conditions and the expected further reduction in interest rates, the market may soon rebound, which could mean rising prices.

Record Prices but the Lowest Growth Rate in Years

In Q3 2025, the average asking price in the seven largest Polish cities reached PLN 15,300 per square meter. This is still significantly higher than in previous years – the psychological threshold of  PLN 10,000 per square meter was exceeded back in 2021. However, the pace of price growth has clearly slowed. In Q3, asking prices increased by only 1.6% y/y, the lowest rate since 2017.

Changes in transaction prices are even more noticeable. Weakened demand has made negotiations more effective – prices increased by just 0.5% y/y the lowest in 11 years. In Warsaw, transaction prices fell by 0.1%; in Wrocław and Łódź by more than 1%; and in Kraków by as much as 2.5%. The secondary market confirms this trend – the average decline in the seven largest cities reached 0.9%, and as much as 2.7% in Warsaw alone.

Economic Growth Accelerates, Interest Rates Decline

Will this trend continue? Everything suggests the situation is about to reverse. The Polish economy is clearly accelerating – in Q3 2025 GDP grew by 3.7% y/y, the fastest in three years. Inflation remains close to the NBP’s target and, according to our forecasts, will stay low in 2026. This paves the way for further interest rate cuts, which will gradually boost demand for mortgages and improve household creditworthiness.

In 2025 the Monetary Policy Council cut rates by 150 basis points, and Colliers forecasts a further 75 basis-point reduction next year. The effects are already visible in the rising number of mortgage applications. In Q3 banks issued 65,000 new mortgages, 41% more than a year earlier. This is similar to the period of the “Safe 2% Mortgage” program, which significantly supported demand in the housing market. Colliers expects the number of newly issued mortgages in 2025 to be the highest in three years, with the strongest results in the final quarter.

When Will Prices Start Rising Again?

Greater interest in buying homes will translate into price increases with a delay. After stabilizing in late 2025 and early 2026, Colliers forecasts a return to price growth in Q2 2026. Developers are already preparing for recovering demand – sales offices are seeing more activity, and in October more than 24,000 building permits were issued, the highest number in a year.

At the same time, construction costs continue to rise, further pushed upward by legislative changes. In the first nine months of 2025, the cost of constructing a multi-family building was 3.4% higher than a year earlier, following previous significant increases.

A Strong Preference for Homeownership

The market remains cautious about the durability of recovering demand. Poland’s demographic outlook is negative, but migration – both international and domestic – will continue to concentrate in the largest cities, increasing local demand.

Poles still live in homes that are too small – 34% of households report insufficient space, one of the highest rates in the EU (the average is 17%). The preference for homeownership remains strong – 87% of Poles own their home, compared to the EU average of 68% and just 47% in Germany.

High housing prices will increase interest in renting, especially among young people who value mobility and flexibility. As a result, the institutional rental sector (PRS) is developing rapidly, and its share of the market will continue to grow in the coming years.

What Does This Mean for Buyers and Investors?

The current price stabilization may therefore be the calm before another wave of increases. It is highly likely that falling interest rates, growing mortgage availability and improving economic conditions will gradually push demand higher – and with it, the price per square meter.