Housing prices in Europe in the third quarter of 2023 compared to Poland

In 10 EU countries, housing prices did not increase in the third quarter of 2023. However, Poland is not one of these countries. Housing prices in Poland not only increased in the third quarter, but were also the highest in the entire EU.

In 10 EU countries, housing prices did not increase in the third quarter of 2023. However, Poland is not one of these countries. Housing prices in Poland not only increased in the third quarter, but were also the highest in the entire EU.

Housing prices in Poland

The most important indicators in the economy include housing prices. When they are too high, fertility and quality of life decline. An excellent example would be countries such as South Korea, China or Canada. Housing prices in these countries have increased so much that the number of births has decreased markedly.

In Poland, this topic causes a lot of controversy and is often an important part of political discussions. Very often the subject of discussion is the rise in housing prices in Warsaw. It is this city (along with Sopot) that is a symbol of the problems with housing prices in Poland. However, as numerous analyzes show, there is no price bubble in the housing market in Poland. The high price of real estate is due to too low supply.

Increasing housing affordability is an important component of many policy programs. Apartment+, Apartment for young people, 2% loan - slogans that have been circulated in the media in recent years. This suggests that this topic is relevant to voters. However, as practice shows, the results of recent government housing programs are not impressive.

House prices in Poland are growing faster than any country in the EU

Eurostat systematically publishes new data on housing prices in EU countries. The latest report leaves no illusions - the dynamics of housing prices in Poland is very high. In the third quarter of 2023, housing prices in Poland increased by 4.5% compared to the previous quarter. This is the highest figure in the entire European Union.

Romania took second place with an increase of 3.4%. In Denmark, growth was 3.1%, which gave it 3rd position in this ranking. Property prices increased by more than 2% in Bulgaria, Spain and Lithuania. Price increases were recorded in 19 countries.

At the same time, in other countries in the third quarter of 2023, there was no increase in housing prices.

In Italy, prices remained unchanged, while in 7 countries they decreased. The largest decline was in Luxembourg - 6.3% (q/q). Price declines were also recorded in Finland (-2.7%), Germany (-1.4%), Latvia (-0.9%), Sweden (-0.4%), Hungary and Estonia (-0. 3%). This means that the decline affects almost exclusively the Baltic countries.

Why are housing prices rising in Poland?

This is partly due to the improving economy. In the first quarter of 2023, prices in Poland stopped rising (and even a slight decrease was observed), the shock caused by the events in Ukraine and the energy crisis began to pass.

The decline in inflation led to the first reduction in interest rates. This brought about the real estate market. Higher availability of credit has had a positive impact on the demand for new housing. This, in accordance with the law of supply and demand, increases the price. Not without significant assistance from the government program “Safe Loan 2%”. This started just in the third quarter of 2023.

In Poland, the year-on-year increase in property values (compared to the third quarter of 2022) was 9.3%. Thus, Poland recorded the second largest increase in housing prices in Europe. Prices rose the most in Croatia, where they jumped by 10.9% (y/y). Taking into account the decreasing price dynamics in Croatia and the growing one in Poland, it can be assumed that in the fourth quarter Polish prices will grow faster year-on-year. Bulgaria (+9.2%), Portugal (+7.6%) and Slovenia (+5.7%) also lead in year-on-year growth in housing prices. The largest declines were recorded in Luxembourg (-13.6%), Germany (-10.2%) and Finland (-7.0%).

As you can see, the differences are significant. While housing prices in Poland rose by almost 10%, in Germany they fell by 10%.

Housing prices in Poland in the long term

But if we look at price growth in the long term, we will find that in Poland it is not so high. Eurostat calculated the state of housing prices in the European Union in relation to 2010. The highest growth in 2010-2023 was recorded in Estonia. Housing prices increased by 210%. Simply put, they are now 3 times more than in 2010.

In addition to Estonia, other post-communist countries are also at the forefront. Second place went to Hungary, where housing prices rose by 185%. Apartments in Lithuania have become 158% more expensive. In the last Baltic country, that is, Latvia, prices increased by 141%. More than 2 times more expensive than apartments in Austria, the Czech Republic and Luxembourg.

A higher increase in housing prices over this period of time than in Poland was also observed in Portugal, Bulgaria, Slovakia, Sweden and Germany. In Poland, prices rose by 73%. Thus, this indicator is in no way unique and the increase in housing prices in Poland over the past 14 years can even be considered relatively low (compared to countries with similar GDP).

Only in Greece and Italy have housing prices not increased since 2010

Two countries currently have property prices lower than they were in 2010: Italy and Greece, with the latest available data for Greece going back to 2022. Countries with the lowest housing prices include Cyprus, Spain, Romania, France, Belgium and Denmark.

It is also interesting that rental prices are rising very quickly in Poland. Their dynamics are almost the same as in the case of housing prices. Rent increases were only recorded in Ireland, Lithuania and Estonia.

Materials used from the site forsal.pl