Poland

With record-low interest rates, constrained supply, and a new housing subsidy program, housing demand in Poland continues to rise strongly. Surprisingly, house price increases have been very minimal. The average price of existing flats in Poland’s 7 big cities (Warsaw, Gdańsk, Gdynia, Kraków, Łódź, Poznań, and Wrocław) rose slightly by 0.3% (1.3% inflation-adjusted) during the year to Q1 2016, according to the Polish central bank, Narodowy Bank Polski (NBP). During the latest quarter, house prices were up by 0.1% (0.8% inflation-adjusted).

• In Warsaw, the country’s capital, the average price of existing houses increased slightly by 0.6% (1.6% inflation-adjusted) y-o-y in Q1 2016.
• Bydgoszcz recorded the biggest increase in house prices of 5.2% (6.2% inflation-adjusted) during the year to Q1 2016, followed by Gdańsk, with a 3.5% y-o-y increase.
• Other Polish cities with minimal house price increases included Lublin, with a y-o-y growth of 2% in Q1 2016, Poznań (1.5%), Białystok (1.5%), Szczecin (1.4%), Gdynia (1.3%), Opole (1.1%), Wrocław (0.6%), Łódź (0.4%), and Olsztyn (0.1%).
• Kraków saw the biggest house price decline of 2.9% (-1.9% inflation-adjusted) during the year to Q1 2016, followed by Zielona Góra (-0.9%), Rzeszów (-0.8%), Kielce (-0.7%), and Katowice (-0.2%).

Warsaw has the most expensive housing in the country, with an average selling price of PLN8,658 (EUR1,975) per square metre (sq. m.) in Q1 2016, according to the NBP. It was followed by Kraków, with an average price of PLN6,827 (EUR1,558) per sq. m., Gdynia with PLN6,407 (EUR1,462) per sq. m. and Gdańsk with PLN6,193 (EUR1,413) per sq. m. In contrast, Zielona Góra has the cheapest housing in Poland, with an average price of just PLN3,447 (EUR786) per sq. m. in Q1 2016. In the first quarter of 2016, the economy expanded by 3% from a year earlier, down from 4.3% growth the previous year. Economic growth is projected to remain strong at 3.6% this year, and at 3.7% in 2017, according to the IMF

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