The real estate market in the capital of Podkarpackie in light of the war in Ukraine

The invasion on Ukraine, launched by the Russian Federation on February 24, 2022, has had a profound impact on many aspects of social, political and economic life in Poland. The real estate market, particularly in Rzeszow and its surrounding areas, has undergone significant changes due to the influx of refugees and the increasing demand for various forms of accommodation.

Rzeszow, the capital of the Podkarpackie Voivodeship, has a unique location near the Ukrainian border. Following the outbreak of war, it became a frontline city, the first major urban centre at a relatively safe distance from the border. As a result, it was one of the main destinations for people fleeing the war. According to the report “Urban Hospitality: Rapid Growth, Challenges, and Opportunities – A Report on Ukrainian Refugees in Poland’s Largest Cities”, published by the Pawel Adamowicz Union of Polish Metropolises Analysis and Research Centre, in May 2022 Rzeszow became home for 117 000 Ukrainian citizens, which was 37% of the city’s population at that time. Only Warsaw, Wroclaw, Cracow, and Gdansk had higher numbers.

Since the escalation of Russian aggression in 2022, Rzeszow – specifically the airport in Jasionka, located north of the city – has become a key hub for military transport. A significant portion of Western military aid to Kyiv flows through this route. Jasionka has transformed into a strategic logistics centre, through which military equipment enters Poland before being transported to the Polish-Ukrainian border, just 100 km away.

The U.S. Army, aiming to protect this crucial site, has stationed soldiers from the 82. Airborne Division in Jasionka since the early days of the war. Currently, Jasionka is protected by American Patriot air defence systems and while the exact number of U.S. troops remains classified, estimates suggest at least 10 000 are stationed there. However, the total number of Americans in Podkarpackie is significantly higher when including the numerous civilian contractors supporting the construction of key military infrastructure. Additionally, many American soldiers have relocated to Poland with their families.

The influx of new residents presents both an investment challenge and an opportunity for the city. On one hand, the situation has required rapid infrastructure development, including expanding school and kindergarten capacity and enhancing services such as offices, retail and public transportation. On the other hand, a growing population has fuelled economic growth. Sectors such as hospitality and gastronomy, which faced difficulties before the war, experienced a boom in 2022. The rental market has also expanded, responding to increased demand.

RENT MARKET

During the COVID-19 pandemic, many apartments remained vacant. However, the war in Ukraine and the refugees pressure have significantly revitalized the rental market in Rzeszow. Initially, refugees sought temporary shelter with family and friends or in accommodations provided by charities and public institutions. Over time, many began looking for long-term housing, driving up rental prices. This demand extended to both small apartments and larger units that could accommodate entire families.

The arrival of American soldiers also played a role. Initially, they settled in towns near Jasionka Airport, but as available housing quickly ran out, demand surged. Today, finding a rental or even purchasing property in these areas is extremely difficult. Consequently, some soldiers, their families and civilian contractors have moved to the city of Rzeszow.

Another factor driving demand was the increasing difficulty for Poles to secure financing due to declining creditworthiness. Many potential buyers opted to rent instead. The surge in demand from Ukrainian refugees, coupled with a shrinking rental supply, led to sharp price increases. Over the course of a year, the number of rental listings in Rzeszow on classified ad portals dropped fourfold.

Until the end of 2021, rental rates for both apartments and single-family homes remained stable, with quarterly changes in the average rent per square meter not exceeding 2-3%. However, from early 2022, rental rates experienced dynamic quarterly increases of 7-10%. Rzeszow recorded one of the highest rent hikes in Poland in 2022. Over the year (Q4 2022 vs. Q4 2021), average rental prices for both apartments and houses rose by 28%. The upward trend continued in subsequent periods, albeit at a slightly slower pace. Over the past three years (Q4 2024 vs. Q4 2021), rental prices have increased by 44% for apartments and over 60% for single-family homes.

CHART 1. AVERAGE ASKING RENTAL RATES PER SQM BY PROPERTY TYPE IN RZESZOW (2019-2024) [PLN]

source: Own analysis based on otodom.pl and morizon.pl

The shifting demographic structure of Rzeszow has also shaped the real estate market. Before the war, students comprised the largest group of renters, leading to high demand for one- and two-room apartments. However, the influx of Ukrainian families increased demand for larger units. Interest in three- and four-room apartments, particularly in well-connected areas, has risen significantly. In 2021, studio apartments accounted for 17% of rental listings, while two-room units made up 52%. By last year, these figures had dropped to just 4% and 33%, respectively. Meanwhile, the share of three-room apartments rose from 29% to 42% and four-room apartments from 2% to 17%.

SALE OF RESIDENTIAL HOUSING

The influx of foreigners has also impacted the property sales market in Rzeszow. Initially, most newcomers sought temporary shelter, but over time, some refugees decided to settle permanently in Poland. As the population grew, interest in purchasing homes increased. Ukrainians, as well as Poles, began seeing Rzeszow as a stable and secure place for investment, driving up property prices—particularly in central locations.

Unlike the rental market, property sales prices did not see dramatic changes in 2022. Immediately after the war broke out (Q1 and Q2 2022), the average transaction price per square meter dropped slightly by 2-2.5% quarter-over-quarter before gradually rising again. By Q4 2022, average apartment prices in Rzeszow had returned to pre-war levels, with a total three-year increase of 17%. Single-family homes saw a minor 0.5% price drop in Q2 2022, but prices generally followed a steady upward trajectory. By the end of 2022, home prices had risen 17% compared to pre-war levels and over the past three years they increased by 13%.

CHART 2. AVERAGE TRANSACTION PRICES PER SQM BY PROPERTY TYPE IN RZESZOW (2019-2024) [PLN]

source: AMRON Centre

CONSTRUCTION MARKET

Due to the city’s growing appeal, Rzeszow has also become an attractive market for investors. The rising population and increased housing demand have spurred developers to intensify their activities, launching new residential projects and investing in infrastructure. Many of these projects aim not only to meet housing needs, but also to accommodate businesses and institutions adapting to new realities.

The long-term presence of U.S. soldiers in the region has significantly influenced suburban real estate markets. In villages near Jasionka Airport, such as Jasionka, Tajęcina, Podbór, Trzebownisko, and Zaczernie, intensive construction activity has been observed. Developers, recognizing the growing demand, have started building new homes and apartments, targeting military personnel as potential buyers or tenants. Property prices in these areas have surged, sparking mixed reactions among locals. Some welcomed high land-sale profits, while others were frustrated by sudden price hikes that made homeownership more challenging. This trend is unlikely to change soon, as the presence of U.S. troops in the Rzeszow area is expected to continue for up to 10 years.

FUTURE OUTLOOK

The war in Ukraine has significantly shaped the development of Rzeszow and its surroundings. Positioned as a logistical hub, the city has undergone rapid transformation over the past three years. Plans to make Podkarpackie and Rzeszow key players in Ukraine’s future reconstruction provide further economic growth prospects. However, the future of the local real estate market remains closely tied to geopolitical developments. One thing is certain: Rzeszow has undergone deep, irreversible changes and will never be the same again.

Agnieszka Pilcicka
Senior Real Estate Market Analyst