Sales up, supply down

In the first quarter of 2026, the Polish housing market recorded a significant increase in sales. A total of 12,900 apartments were sold across the country's seven largest cities (an increase of 11.1 pct quarter-on-quarter and 35.2 pct year-on-year). It is worth noting that this increase occurred despite the long holiday break in January and February, and additionally, buyer sentiment in the last weeks of March was impacted by the Iran War. The largest quarter-on-quarter sales increase was seen in Katowice (+51 pct), which, however, translated into only around 170 more transactions. In Warsaw and Łódź, sales increased by 16.7 pct and 17.5 pct quarter-on-quarter, respectively, while a further increase in demand was also seen in Kraków and Poznań. Sales outpaced new supply in six of the seven metropolitan areas – Kraków was the exception, where 13 pct more apartments were launched than in the previous quarter.

A total of 10,300 apartments were put on sale. New apartments sold were down 27 pct compared to the fourth quarter of last year. Stabilisation in the supply is primarily visible in Wrocław and Poznań, while other cities (excluding Kraków) saw a significant slowdown in this activity, which is typical for the beginning of the year.

As a result, the number of apartments available for purchase decreased slightly in most cities (or remained unchanged). At the end of March, the seven largest markets totalled around 69,000 apartments – a level close to historical highs. This number also includes unsold reservations, which totalled around 6,400 at the end of the first quarter.

Different Prices in different cities

The first quarter saw further variation in both prices and the supply and demand in individual cities. The average price of apartments on offer at the end of March was affected by newer and often more expensive developments – particularly in Warsaw, where the average price rose by 6.2 pct quarter-on-quarter to PLN 19,900 per sqm. A similar increase was recorded in Poznań (+2.4 pct quarter-on-quarter to PLN 14,100 per sqm), while in the other cities the change was no more than 0.6 pct. Annual increases in the average asking price were only above inflation in Warsaw and Poznań, while in Wrocław, it significantly declined.

The cities are also becoming increasingly differentiated in regard to supply and demand. Warsaw has entered a period where prices are dominated by demand due to a slight housing shortage. The Tricity remains a market close to equilibrium, a level that Wrocław is rapidly approaching. In Kraków and Poznań, however, supply still outpaces demand, although this gap is clearly narrowing. The longest period required to sell out all new apartments is in Łódź (over 2 years) and Katowice (over 3 years).

Development Market

Looking at sales and the number of apartments put up for sale in the first quarter, it is worth remembering that these figures reflect the results of various decisions made earlier at different times. For sales statistics based not on reservations but on development contracts, buyers' decisions were mostly made at least several weeks earlier. To put it simply, we can say that March sales largely reflect decisions from February, sometimes January, and sometimes the first few days of March.

The decision to introduce new developments to the market is similar to that for sales. Typically, the introduction of properties to the market involves several stages that take months, but the final appearance of the majority of new listings in March was in most cases, the result of decisions made in February or, at the latest, early March. This is significant for this quarter because, at the beginning of March, there was still hope that the current war in Iran, like the previous Gulf war, would last a few weeks and not have a significant impact on the Polish economy, inflation, or the housing market.

Today, we know that this has not happened. This war has lasted longer with a number of consequences, the significance of which extend far beyond inflation. We do not know when it will end nor what the consequences will be. It will likely bring not only higher fuel cost and price rises for a range of raw materials typically entering Europe from this region. Transport costs from the region may become permanently higher, as the risk of another lockdown will have to be permanently factored into prices.

What does this mean for the development market in Polish cities? It is almost certain that loan interest rates will remain close to current levels for an extended period (if they don't start rising), rather than continuing to decline, as was expected at the beginning of the year. Construction costs will rise, both due to the costs of energy and fuel for transport and operation of equipment, as well as energy-intensive materials. Supply chain disruptions will occur, resulting in—hopefully temporary—problems with some products. Paradoxically, this could initially be beneficial for developers. Customers will quickly understand

They understand that finished or nearly finished apartments are a product safe from disruption, a product worth buying now, because the price and delivery date are known.

Price Pressure and Restriction on New Projects

The situation with new projects will be less clear. Construction companies will have to start factoring the risk of price increases into their final costs, as will developers operating under their own construction management models. It's worth noting that any forecasts of price increases currently have very fragile and uncertain foundations. Therefore, the prices of new apartments will necessarily rise, and their number will likely begin to decline.

In the case of Warsaw, this will mean a relatively rapid decline in the number of apartments on sale and the entry into a period of supply shortage; in other cities, this will mean a faster or slower elimination of the supply surplus. The closer a given market is to equilibrium, the faster the prices of finished apartments will begin to rise as their number decreases. When this happens, sales may accelerate even further, as some potential buyers expected further declines in rates and prices, and risk-takers seeking to profit from speculation will join the average buyers.

On the other hand, in the long term, we may see significant caution in new investments by mid-sized players and volatile policies by the largest listed companies, which typically exploit similar crises to increase their share of the shrinking market.

Once again, the Polish housing market is becoming a playing field shaken by forces and phenomena unrelated to this market. A market where hope and optimism prevailed just a few weeks ago is becoming one rife with uncertainty and fear, and this is not good for either buyers or sellers in the long run.