Despite a high level of homeownership, the housing market in Poland is suffering from an important shortage. The
difference between the number households and available dwellings, the number of dwellings per thousand
inhabitants, and the availability of basic amenities (especially in rural areas) all indicate that significant improvements
are needed to catch up to the most affluent OECD and EU countries. The formal rental segment of the market is also
underdeveloped, contributing to low labour mobility and persistent disparities in regional unemployment. Given the
social, economic and political dimensions of the problem, various housing policies implemented since the beginning
of the transition process have aimed to fill the housing gap, though they have been either narrow in scope or have led
to unclear results. However, the housing market has been buoyant in recent years, spurred by rising levels of GDP per
capita, lower interest rates and the emergence of a competitive mortgage market. Yet a brisk price appreciation has
also occurred at the same time, while households’ exposure to interest- and exchange-rate risks has significantly
increased and banks’ funding capabilities have shrunk. Although the market has not been directly affected by the
recent global financial turmoil, recent information shows that a turn-around is underway, with prices declining in
several major cities as sentiment has plunged. This raises concerns about the capacity of the market to achieve a
smooth adjustment in the face of a possible downturn.
