The surprising effect of the war in Iran. Analysts indicate what will happen to apartment prices in large cities

The conflict in the Middle East will have noticeable, but not revolutionary, consequences for the Polish housing market – according to the report by Alior Bank “How will the war in Iran affect the Polish housing market?”. It was indicated that the dynamics of demand for apartments would slow down slightly, among others. as a result of the cooling of household sentiment, but it should be higher than in 2025.

According to Alior Bank analysts, the geopolitical brake resulting from the conflict will only be temporary. The long-term prospects for the market remain unchanged and are – in their opinion – favorable. In 2026 economists also predict a high supply of apartments in Poland and stabilization of average transaction prices on the primary market of large cities.

It was reported that the base scenario assumes a gradual calming down of the conflict in the coming weeks and a relative normalization of the liquid fuel market by mid-year. For the Polish economy this means, among others: increasing price dynamics, weakening household consumption and the probability of suspending interest rate cuts by the Monetary Policy Council until the end of the year.

Nevertheless, according to Alior Bank economists, in 2026 we will still observe a recovery in demand on the housing market compared to 2025. Current analyst forecasts in this respect are slightly less positive than before the outbreak of the conflict: in the more pessimistic variant, the demand for apartments in 2026 will increase by single digits, and in the more optimistic one – at a rate slightly above 10%. (year to year, quantitative).

“The war in Iran will cool the mood of participants in the Polish housing market, but in the coming months, in our opinion, they will return to the previous upward trend. We observed a similar phenomenon after the outbreak of the war in Ukraine, but now the improvement should be faster, in our opinion, due to, among others, regulations on fuel prices implemented in March and the geographical distance of Iran from Poland,” said Wojciech Szajnert, an expert in sector analyzes from Alior, quoted in the press release. Bank.

Due to the conflict, analysts are slightly revising their predictions regarding the supply of apartments in Poland in 2026. According to their forecast, approximately 225,000 apartments will be completed in Poland this year. residential premises, which will be a slightly lower result than expected before the outbreak of the war in the Middle East, but still high compared to recent years.

It was reported that the main driving force behind the increase in supply will be the number of apartments put on the market by developers. They are currently finishing projects that they planned in the 2021-2022 boom and started building around 2023-2024, so the conflict in Iran will have only a slightly negative impact on the implementation of these plans.

The war will have a slightly more visible impact on the construction of single-family houses. In this field, there will still be a year-on-year supply increase in 2026, but it will be smaller than previously assumed and probably only single-digit.

“In the development sector, the effects of the war in Iran will, in our opinion, be felt mainly by companies operating in less attractive locations and small entities that treat real estate development as a complement to their business,” said Wojciech Szajnert, an expert at Alior Bank.

“The conflict-related weakening of demand dynamics and the increase in the costs of construction materials, combined with pre-existing unfavorable factors, may tip the balance and force some of such enterprises to suspend construction works and reduce prices. However, the conflict will not have a significant impact on large development companies,” he added.

According to Alior Bank analysts, the dynamics of demand for apartments in 2026 will be comparable to the dynamics of supply, and in an optimistic scenario – only slightly higher (y/y, in quantity). As a result, there should be an excess of premises on the market in the coming months.

The likely effect will be stabilization of transaction prices of apartments on the primary market of the largest cities in 2026 (year-to-year). There is also a possibility that they will drop slightly in the first half of the year. The following factors may contribute to this: price transparency introduced last year, the activity of independent portals monitoring the real estate market and weak investment demand.

As for the scale of housing supply after 2026, economists do not expect the market to return to growth similar to that of the first two decades of the 21st century. The number of completed premises will remain at a level comparable to the period 2020-2025 until the end of the decade.

According to Alior Bank analysts, this can also be expected in the coming years consolidation of the development sector. Many small entities will disappear from the marketwhich started operating at the peak of the bull market of 2021-2023. Takeovers of entire companies or selected investments carried out by them are also possible. The outbreak of the conflict in Iran will further accelerate these trends.

In the coming years, the Polish housing market will also reach further saturation points. The demand will continue for a decade or more, even despite the fact that the fundamental demand for own “M” will probably be met on a national scale around 2028. Analysts also predict changes in the nature of demand. According to forecasts, they will increase, among others: requirements of buyers who will increasingly want to improve their standard of living by purchasing a flat.

However, the upcoming parliamentary elections may have a significant impact on these forecasts. According to analysts, the election period may favor regulatory changes in the field of housing. However, in the longer term, the key risks are geopolitics and demographic issues, especially the scale and direction of foreign migration to and from Poland. However, the probability of occurrence and the direction of impact of each of these factors is difficult to predict. (PAP Biznes)'

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