In the next dozen or so years, the dynamically changing demographic structure of society will largely shape the Polish housing market. We're looking at what might happen.
According to the study prepared by the Central Statistical Office: “Forecasts of Poland's resident population for the years 2023-60”, Poland's population will drop from the current over 37 million to approximately 36.6 million in 2030, 35.3 million in 2040, and in the longer term even to 33 million. However, “Population simulation until 2060 – experimental study” indicates that with extremely low fertility, the population may decrease even further, even to 28-29 million by the end of the century.
At the same time, society is aging rapidly. Eurostat in the report “Ageing Europe – looking at the lives of older people in the EU” estimates that in 2030 people aged 65+ will constitute over 22% of the population, and in 2060 about 30%. According to the Central Statistical Office, in 2060 the percentage of the population aged 60 plus in Poland will be over 38%. (report “The situation of older people in Poland 2023”). This means that seniors will become one of the largest social groups, and their housing needs will clearly influence the direction of market development. In many regions, they will dominate among buyers and tenants, which will force changes in the design and structure of construction.
Seniors' preferences: more apartments, but differently organized
Seniors more often live in pairs without the rest of the family or alone after the death of a spouse and usually prefer apartments located closer to medical services, stops and shops. They rather value smaller spaces, adapted to their own needs – cheaper and easier to maintain. Therefore, over time, the growing number of older people may result in an increase in the supply on the secondary market of older, large apartments – family apartments which, after the death of a spouse and children moving out, can be sold with the intention of buying a smaller one or exchanging it.
Accessibility is important for seniors – apartments in low-rise buildings or in buildings with an elevator, with a small area that allows for easy maintenance. Solutions that facilitate everyday functioning are of great importance: no thresholds, appropriate widths of passages and the possibility of installing handles. According to GetHome.pl experts, when it comes to the building, the standard should be an elevator, a ramp for wheelchairs and the absence of other architectural barriers. Along with specific housing needs, the demand for supported housing and modern housing estates with care services is growing. This market, highly developed in the West, is still at the growth stage in Poland. However, the number of commercial homes for seniors and senior housing estates is increasing. It is expected that in the next dozen or so years it will be an important branch of the real estate market.
Migrations as “rescue” for the largest cities
Against the background of unfavorable demographic trends, migrations – both internal and foreign – are a factor that can stabilize the market. In the report “Natural population movement. Internal and foreign migrations”, the Central Statistical Office indicates that all the largest metropolises record a positive migration balance. Warsaw, Kraków, Wrocław and Tricity attract young people, students and economic migrants, which strengthens the demand for apartments, especially in the rental segment.
In its “Report on the situation in the residential and commercial real estate market in Poland”, NBP notes that migration – especially after 2022 – has become one of the main factors stabilizing demand. According to current forecasts, a return to the situation before mass migration from Ukraine should not be expected; many people will remain in the largest cities, which will maintain housing demand.
Rental market: a growing segment driven by demographics
NBP in its annual reports “Reports on the situation on the residential and commercial real estate market” estimates that the rental market in Poland is in a phase of dynamic development. Social changes – fewer marriages, delayed decisions about starting families and growing professional mobility – strengthen this segment. The OECD in its analyzes of the “OECD Housing Policy Toolkit – Addressing Housing Affordability, Quality and Accessibility” indicates that countries with similar demographic trends are observing a gradual transition from the ownership model to a mixed one, in which rental plays an increasingly important role.
Migrants – both domestic and foreign – naturally start the settlement process by renting, which further increases demand. According to the National Bank of Poland, in metropolitan areas the institutional rental market will begin to play a stabilizing role and reduce the risk of vacancy.
What about smaller centers? Oversupply and price drops are very likely
The forecasts of the Central Statistical Office presented in the “Forecast of Poland's resident population for the years 2023-60” indicate that many smaller and medium-sized cities, especially in the Opole, Świętokrzyskie, Lublin voivodeships and in parts of the Podlaskie and Łódź regions, will lose up to a dozen or several dozen percent of their inhabitants in the coming decades. In such locations, demography will directly lead to an oversupply of apartments, especially in older housing stock, the modernization of which is expensive and difficult to carry out given the weakening demand.
In the “Report on the situation in the residential and commercial real estate market in Poland”, NBP points out that in regions with a persistent negative migration balance, there is practically no room to maintain current prices, and in some cities real price declines – both offer and transaction – are already occurring and may deepen in the longer term. This applies not only to district cities, but also to some voivodeship capitals that do not belong to the largest agglomerations.
Central Statistical Office forecasts indicate that in the coming decades significant population losses may occur, among others, in Kielce, Opole, Łódź, Lublin, Białystok and Olsztyn. In these centers, especially where the rate of population aging is the highest and the migration balance is negative, the housing market may enter a phase of stagnation or price declines, and oversupply – even if it appears gradually – may be permanent.
The housing gap as a factor mitigating the risk of oversupply
According to GetHome.pl experts, it is worth emphasizing that even with unfavorable demographic trends, Poland is still struggling with a significant housing gap. According to NBP data presented in the “Report on the situation in the residential and commercial real estate market in Poland” and according to Central Statistical Office estimates, this gap ranges from approximately 1.5 to even over 2 million apartments, taking into account the technical standard, the need to replace the oldest stock and the increase in the number of households. This means that despite the expected decline in population across the country, the demand for new housing will not disappear immediately, and in many regions it will remain significant in the coming years.
NBP points out that the housing gap in the largest agglomerations practically acts as a shock absorber – it limits the risk of oversupply even in the event of a demographic slowdown, because the number of apartments still does not keep up with the structure of households and migrations. Only in smaller cities, especially where the number of inhabitants is decreasing and the share of older people is increasing, the surplus of resources becomes a real problem and price drops are more likely.
Singles' preferences: small spaces and good communication
The Central Statistical Office in its “Household Forecast for 2016–2050” and the National Bank of Poland in its analyzes of the structure of housing demand indicate that single-person households will grow the fastest. According to the “Household Forecast for 2016-2050” by the Central Statistical Office, the number of single-person households is expected to increase from less than 4 million around the middle of the previous decade to over 6 million in the middle of the century, which means an increase by more than half; According to forecasts, the number of single-person households will grow the fastest.
The so-called singles most often choose apartments:
- from 28 to 45 m²,
- in locations close to work and services,
- with a high functional standard,
- well connected by public transport.
This demand segment will be the most important for developers in the largest cities.
Summary: a market that will split into two poles
In the next dozen or so years, the Polish housing market will become more diversified. Large cities – strengthened by migration and the growing number of singles and seniors – will maintain stable demand and relatively high prices. The rental segment will develop faster than before. However, smaller centers will face the problems of depopulation and oversupply of housing. Demography will become the most important factor shaping the value of real estate in the long term – predict experts from the GetHome.pl website.
Marcin Moneta
