Global Real Estate Market Analysis According to UBS: Why Invest in Poland?

The global real estate market in 2024 is in a phase of correction following a period of dynamic growth, primarily driven by low interest rates. This situation has changed with a sharp rise in inflation and interest rates, which has led to declines in property prices in many key cities around the world. However, Poland stands out in this context, offering stability and attractive conditions for investors.

Table of Contents:

1. Global Trends in the Real Estate Market

2. Poland in the Global Context: Stability and Growth Potential

3. Why Invest in Poland?

1. Global Trends in the Real Estate Market

In recent years, global real estate markets have experienced dynamic growth, particularly in major metropolitan areas. This growth was mainly fueled by cheap credit and increasing demand for real estate as a form of capital protection. According to the UBS Global Real Estate Bubble Index 2023, property prices in many cities around the world began to fall over the past four quarters. The sharp rise in interest rates led to a decrease in demand, especially where property prices were disconnected from residents' incomes and rents. In cities such as Frankfurt, Munich, and Toronto, real estate prices have fallen by more than 10% in real terms.

2. Poland in the Global Context: Stability and Growth Potential

In the context of global turbulence, Poland stands out as a relatively stable real estate market. Although some price corrections have also been observed here, the scale of declines has been significantly smaller compared to other countries. Warsaw, as a key real estate market in Poland, has experienced a real terms price decline of about 10% over the past year, yet it remains one of the more attractive places to invest in Central and Eastern Europe.

"Real house prices in Warsaw increased by almost 40% between 2012 and 2022. The city attracted new citizens and buy-to-let investors alike. Strong employment prospects, a subway expansion, and modern housing developments kept the market attractive. [...] However, new mortgage subsidies are about to trigger a buying frenzy."​

(UBS, Global Real Estate Bubble Index 2023, p. 8).

3. Why Invest in Poland?

1. Economic Stability and Growing Demand: Poland, thanks to its stable economy and relatively low inflation compared to other countries, offers secure investment conditions. High demand for rental properties, especially in major cities such as Warsaw, Kraków, and Wrocław, ensures stable returns for investors.

2. Attractive Financial Conditions: Despite the rise in interest rates, the cost of financing real estate in Poland remains at a moderate level, making property investments more accessible than in many other Western European countries.

3. Potential for Property Value Growth: In the longer term, Poland can expect further increases in property prices driven by infrastructure development, growing affluence, and an influx of foreign investments.

Summary

While the global real estate market is undergoing a period of correction, Poland continues to offer solid foundations and growth prospects that attract discerning investors. Economic stability, attractive financial conditions, and growing demand make Poland one of the best places to invest in real estate in Europe.

Investors who choose to invest in Poland can expect stable returns and capital security in the long term.