In the 2022 the activity in the real estate market in the major cities slackened greatly. In the third quarter of 2022 home sales were significantly lower than in 2021 as a result of rising home prices and costs of financing.

Cost of housing construction continued to rise rapidly, especially as regards materials and labour. As a result of Russia’s military aggression against Ukraine there has been a shortage of construction workers, consequently reducing the supply.

The primary and the secondary housing market of large cities has seen a growth in average transaction prices per square metre of housing. In the commercial real estate market, the previously observed trends have continued. All markets have seen a fall in real rental rates.

A considerable rise in demand for rental, as a result of students returning to colleges and universities after the pandemic was suppressed as well a demand from war migrants from Ukraine, and a rise in inflation boosted rental rates in the largest cities again.

The commercial real estate market got back to a normal functioning, but mobility restrictions imposed during the pandemic accelerated the previously changes. Remote work has become more popular, driving down demand for office space.

Older office and retail real estate in poorer locations may need to decrease their rents in order to keep tenants. The office real estate market also runs a risk of older buildings in poorer locations being crowded out by modern, energy efficient office buildings.

Source: Narodowy Bank Polski, Financial Stability Report, December 2022.


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