The rental housing market in Poland is experiencing an excess of demand over supply.

The shortage of rental housing stock can be attributed to both a structural housing deficit and recent demand-side developments.

Since 2021, Poland's rental housing market has experienced a significant surge in demand, driven by several key factors outlined below. 

• Following the COVID-19 pandemic, demand for rental housing increased as employees returned to offices and university students resumed on-campus learning.
• The outbreak of war in Ukraine in 2022 led to a massive influx of refugees, driving up demand for rental housing, particularly in large metropolitan areas
• A sharp rise in interest rates and reduced mortgage availability – due to tightened regulatory requirements on how banks assess creditworthiness of mortgage applicants – prevented many Poles from buying homes, pushing them into the rental market.

We expect: 

• the inflation rate will most likely decrease gradually over the next few years, 
• mortgage interest rates will improve but will most likely remain above five per cent for the foreseeable future, and 
• the rate of income growth will return to positive levels in real terms. 

It seems that the conflict in Ukraine will continue for some time. Although there has been a partial outflow of refugees returning to Ukraine – and more may eventually follow – some Ukrainian refugees are expected to stay in Poland for an extended period or even permanently.

The Polish economy is expected to recover following the recent slowdown and will require more workers. This will likely result in a new wave of economic migrants entering Poland.

Together, these factors will sustain high and steadily increasing demand for rental housing.

Wages in Poland have increased significantly in recent years, with average monthly gross earnings in the business enterprise sector showing a notable upward trend. However, for homebuyers, this wage growth has been outpaced by a disproportionately rapid rise in housing prices. As a result, the purchasing power of Poles remains constrained.

In recent years, a sharp rise in interest rates has led to reduced mortgage availability, driven by tighter regulations on how banks assess the creditworthiness of applicants.

During this period, mortgage approvals were primarily driven by subsidised housing loan programmes. These initiatives are a recurring feature of the Polish housing market and form part of the government's housing policy to support homebuyers. However, due to budgetary constraints, such programmes are often limited in both availability and duration, reducing the long-term accessibility of affordable housing loans for many buyers. Excluding the temporary surge in approvals linked to these subsidies, overall mortgage availability has remained restricted.

The combination of constrained purchasing power and reduced access to mortgages has led to a growing reliance on renting to meet housing demand.

While the Polish government has made some efforts, it is unlikely that the government will be able to effectively develop any significant municipal or social housing programmes due to state budgetary constraints and other competing priorities such as defence, healthcare, energy security and renewable energy transition initiatives.

The government’s inability to sustain the measures required to stimulate and support housing programmes that can make a significant impact will continue to drive demand for rental housing.