Two decades of housing surprises

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

Over the past 20 years, apartment prices have risen by 327% in Łódź and 164% in Warsaw, yet inflation-adjusted prices in the capital remain below their 2007 housing bubble peak. We analyzed the data to find out where prices have risen fastest, when they have fallen, and why buying an apartment is not always a good investment.

Property investment is sometimes described as Poland's national pastime. The popularity of real estate as a way to invest savings comes with a number of widely held beliefs about how the market behaves over the long term. One is that property prices always go up. Another is that the greatest gains can be made in the largest metropolitan areas. The data, however, suggest that both assumptions need some serious qualifications.

We set out to examine how Poland's housing market has changed over almost 20 years. Our analysis draws on quarterly data from the National Bank of Poland (NBP) covering the country's 16 regional capitals and the city of Gdynia, from the third quarter of 2006 to the second quarter of 2026. The past cannot, of course, predict future price movements, but it can help us understand the long-term forces shaping the market.

1. Apartment prices in regional capitals have risen by 150–320% in 20 years

NBP data show that apartment prices on the secondary market have increased at least two and a half times in every city analyzed over the past two decades. For our comparisons, we used the NBP's hedonic price index, which, unlike a simple average price per square meter, accounts for differences between properties being sold, including their location, size, and the age of the building.

This distinction matters. If a larger share of transactions in a given quarter takes place in more expensive neighborhoods, the average price per square meter may rise even if the prices of comparable apartments remain unchanged. The hedonic index reduces the impact of such changes in the composition of sales, providing a more accurate picture of underlying price movements.

According to this measure, Wrocław recorded the smallest increase, at 151%, while Łódź saw the largest, at 327%. Prices in Warsaw rose by 164%, compared with an average increase of 231% across the six largest cities. Smaller markets were not far behind: prices in the other ten cities increased by an average of 210%.

2. The biggest price increases occurred in cities where apartments were initially cheapest

These gains were not evenly distributed over time. Most occurred during the 2006–2007 housing boom and over the past decade. Between those periods, the market experienced several years of declining prices.

The data reveal a clear relationship between initial apartment prices and their subsequent growth. Cities where properties were cheapest per square meter at the beginning of the period generally recorded the strongest gains over the following two decades.

The chart illustrates this pattern. In the third quarter of 2006, average transaction prices on the secondary market in Łódź, Katowice, and Zielona Góra hovered around PLN 2,000 per square meter. In all three cities, they subsequently increased by more than 300%. By contrast, cities with the highest initial prices, including Warsaw, Kraków, and Wrocław, recorded increases of around 200%.

The difference is substantial. The popular assumption that the largest and most expensive metropolitan areas offer the greatest potential for property appreciation is therefore not supported by these figures, at least when considering changes in apartment prices alone.

One methodological distinction is worth noting. This comparison uses different data from the first part of our analysis. The hedonic index adjusts for changes in the quality and characteristics of apartments sold, but it does not provide their initial price levels. We therefore used average transaction prices on the secondary market for this comparison.

3. Apartment prices in most cities have moved closer to Warsaw's

If prices rose faster in cheaper markets, it follows that they must have caught up with Warsaw to some extent. And that is precisely what happened. In 13 of the 16 cities compared with the capital, apartment prices are now higher relative to Warsaw than they were 20 years ago.

That does not mean the price gap in złoty terms has narrowed. Quite the opposite. In 2006, an apartment in Łódź cost PLN 3,600 less per square meter than one in Warsaw. Today, that difference has widened to PLN 8,700.

Kraków comes closest to Warsaw's prices, with apartments costing an average of 88.5% of the capital's price per square meter. Gdańsk follows at 83.9%, and Wrocław at 75.3%. Interestingly, Kraków and Wrocław, along with Olsztyn, are the only cities that have fallen further behind Warsaw in relative terms over the past two decades. Both, however, started from exceptionally high price levels.

Gdańsk has closed the gap with the capital the most. In 2006, an apartment there cost less than two-thirds of the Warsaw price per square meter, or 63.4%. Today, that figure is almost 84%. As a result, Gdańsk has climbed from fifth to third place among the most expensive cities in our analysis.

Rzeszów has not been far behind. Its prices have risen from 47.7% to 65.6% of Warsaw's, moving the city from tenth to sixth place. The cheapest markets, Łódź, Katowice, and Zielona Góra, have also narrowed the relative gap substantially, by 14–15 percentage points.

There are limits to this convergence, however. Apartments in Łódź and Katowice still cost less than half as much as those in Warsaw, leaving both cities at the bottom of the price rankings. At the other end of the spectrum is Olsztyn, which ranked seventh among the most expensive cities in 2006 but has since fallen to twelfth place.

4. Two housing market corrections: after 2007 and in 2022–2023

In the third quarter of 2007, apartment prices in Poland's seven largest housing markets were almost 59% higher than a year earlier. The boom, however, quickly came to an end. From 2008 onward, prices fell more often than they rose for five years, and a sustained upward trend did not begin until 2014.

Between the 2007 peak and the 2013 trough, apartment prices in the seven largest markets declined by almost 18% on average, according to the NBP's hedonic index. The steepest corrections occurred in the Tri-City area of Gdańsk, Gdynia, and Sopot (28.1%), Wrocław (26.8%), and Poznań (25.2%). Kraków, Łódź, and Warsaw recorded declines of around 20%.

Once inflation is taken into account, the losses were even more substantial. In real terms, apartment prices fell by an average of 32%, with declines approaching 40% in the Tri-City area and Wrocław.

A second correction came more than a decade later, although it was less immediately apparent. In 2022–2023, nominal apartment prices continued to rise, but much more slowly than inflation, which exceeded 17% toward the end of 2022.

In the first quarter of 2023, apartment prices in the seven largest markets were 5% higher than a year earlier in nominal terms. After adjusting for inflation, however, they had fallen by more than 10%. Between the peak in late 2021 and the first quarter of 2023, their real value declined by 11%.

This correction proved much shorter than the previous one. Another surge followed in 2023–2024, with annual apartment price growth in the seven largest markets reaching 19% at its peak.

The market subsequently slowed considerably. Since 2025, inflation-adjusted apartment prices have remained broadly stable. In the second quarter of 2026, they were 2% higher than a year earlier in nominal terms, but 0.8% lower after adjusting for inflation.

5. In some cities, real apartment prices have still not returned to their 2007–2008 bubble peaks

Nominal property price increases can look impressive. But it is important to remember that consumer prices in Poland have almost doubled over the past two decades. According to Statistics Poland (GUS), cumulative inflation between the third quarter of 2006 and the second quarter of 2026 amounted to 98%.

Once inflation is factored in, the housing market looks very different.

The next chart illustrates this by comparing current inflation-adjusted apartment prices with their peaks in 2007–2009. We used the NBP's hedonic price index, which accounts for changes in the characteristics and quality of properties sold.

In Warsaw, real apartment prices are still more than 12% below their level in the third quarter of 2007. The situation is similar in Poznań. In Wrocław, the gap is 5%, while in Rzeszów it stands at 2%. The average for the seven largest cities has practically returned to its pre-crisis level but remains 0.4% below its previous peak. This illustrates just how inflated the housing market became during the 2006–2007 boom.

Even in cities where real prices have surpassed their pre-crisis highs, most did so only recently. Kraków, Lublin, Łódź, Katowice, and Szczecin crossed that threshold in 2023–2024, while the Tri-City area and Olsztyn did not reach it until the second quarter of 2026.

The strongest real price increases relative to their pre-crisis peaks were recorded in Zielona Góra (29%) and Opole (19%). These were markets where the pre-2008 housing boom had been relatively modest.

Importantly, even without adjusting for inflation, recovering from the first housing boom took a remarkably long time. Nominal apartment prices did not sustainably return to their previous highs for another eight to 12 years. Bydgoszcz recovered fastest, after eight years. Warsaw, Poznań, and Wrocław took the longest, with prices finally exceeding their earlier peaks in 2019, almost 12 years later.

Of course, changes in a property's value alone do not determine whether it has been a profitable investment. For apartments purchased to rent out, rental income must also be considered. On the other hand, acquisition and maintenance costs, taxes, and periods without tenants all affect the final return. Only by accounting for all these factors can investors assess the true profitability of a property investment.

Apartment prices rose fastest in the cheapest markets. Over almost 20 years, prices increased by between 151% and 327%. The largest gains occurred in cities that started with the lowest prices, such as Łódź, Katowice, and Zielona Góra. As a result, apartment prices in 13 of the 16 cities compared with Warsaw moved closer to the capital's in percentage terms, even though the gaps in absolute złoty values sometimes widened.
Apartment prices do not always go up. Following the 2006–2007 boom, the market experienced several years of declining values. Nominal prices fell by more than 25% in the Tri-City area, Wrocław, and Poznań. Another, less visible correction occurred in 2022–2023. Although nominal prices continued to rise, their inflation-adjusted value fell by 11%. Since 2025, real apartment prices have remained broadly stable.
Inflation fundamentally changes the picture of Poland's housing market. Consumer prices rose by a cumulative 98% over the nearly 20 years analyzed, meaning real property price gains were much smaller than nominal figures suggest. In Warsaw and Poznań, apartments are still around 12% cheaper in real terms than at the peak of the 2007 bubble. The average for the seven largest markets remains just 0.4% below that level.