Interest Rate Expectations Shift Buyer Behaviour in Warsaw's Dynamic Market

Warsaw's real estate market is experiencing a significant shift in buyer behaviour, driven by changing interest rate expectations. The key fact is that the average mortgage rate in Warsaw has increased by 1.5 percentage points over the past year, reaching 6.2% in June 2026.

This matters now because the rising interest rates are affecting the purchasing power of buyers, making it more expensive to borrow money and increasing the monthly mortgage payments. As a result, buyers are becoming more cautious and strategic in their decision-making, with many opting for shorter mortgage terms or seeking out more affordable properties in up-and-coming neighbourhoods.

In Warsaw, neighbourhoods like Praga and Wola are becoming increasingly popular among buyers looking for more affordable options. The area around Aleja Solidarności and ulica Grzybowska is also seeing a surge in interest, with prices per square meter ranging from 12,000 to 18,000 złoty. Organisations like the Warsaw Real Estate Chamber and the Polish Association of Developers are reporting an increase in inquiries about properties in these areas, as buyers look for more affordable alternatives to traditional hotspots like Śródmieście and Mokotów.

According to data from the Polish Central Statistical Office, the average price per square meter of residential property in Warsaw has increased by 10.2% over the past year, reaching 14,500 złoty in Q2 2026. Meanwhile, the number of mortgage applications has decreased by 15% compared to the same period last year, as buyers wait for interest rates to stabilise or decrease. The data also shows that the majority of buyers, 62%, are opting for mortgage terms of 20 years or less, down from 75% in 2025.

Market Outlook

As the market continues to evolve, it's likely that we'll see a greater emphasis on affordability and flexibility in the coming months. Buyers will need to be strategic and adaptable, considering factors like interest rates, mortgage terms, and property prices when making their decisions. For those looking to enter the market, it may be worth considering alternative neighbourhoods or working with organisations like the Warsaw Real Estate Chamber to find the best options. With the right approach, buyers can still find great opportunities in Warsaw's dynamic market, even in the face of rising interest rates.