A review of the real estate market in Poland - 2017

A record jump in the number of transactions is being recorded in Poland, and real estate prices are still stable. Every third apartment in a new building is bought by investors who want to earn money on rent. Not only Warsaw is in the centre of attention, but also other major cities. For the Russians, the country remains exotic. Oruga Group presents a brief overview of the real estate market in Poland.

History

In the early 2000s, the Polish real estate market was growing quickly. Mostly due to the generosity of local banks, which were giving loans to citizens not only in zloty, but also in dollars and Swiss francs. It made the prices go higher.

The "Golden period" ended in 2009, when the Polish economy was shaken under the influence of the global financial crisis. The zloty rate fell sharply, as a result, many borrowers who borrowed in foreign currency could not pay off their debts. The period of falling prices, which lasted six years, had begun.

Over the years of the crisis, real estate has become cheaper in all regions of the country. The prices went down 20-30%, depending on the type of object. In 2015-2016, they have stabilised. The value of real estate does not fall, but there is no rapid growth either. Prices are 5-15% below the peak level of 2008.

After joining the European Union in 2004, Poland began to reform the legislation, including in the sphere of real estate sales to foreigners. Now citizens of EU countries, as well as third countries (Russia, Ukraine, Belarus) are equal before the law. Everyone is allowed to acquire in full private ownership of apartments and detached houses with land plots. Only with the purchase of agricultural and forest lands they need to have permission of the Ministry of Internal Affairs.

 

In Polish cities (such decisions are in the competence of the mayoralty) the right of priority purchase on the secondary market (for example renovated housing), is used by the mayoralty. This does not mean that the administration buys everything, usually the authorities are not interested in this. But the information is submitted to the mayor's office and within a month there is a pause in the registration of the transaction. If the government did not respond to the offer of priority purchase, the transaction continues.

We should pay attention to this feature: in the secondary market there are municipal, cooperative and private apartments. For the foreigner the best option is to buy an apartment with private ownership. The worst option - buying a municipal apartment. In this case, the buyer receives only the right of residence and nothing more.

Trends

The Central Bank of Poland notes a slight increase in housing prices. In the fourth quarter of 2016, new real estate in Warsaw went up by an average of 3%, secondary - by 0.6%. Similar dynamics - a 0.5-3% growth - is observed in other cities.

The most expensive real estate, according to the Central Bank, is located in Warsaw - on average, a flat in a new real estate costs € 1,800. Relatively high prices are also in Krakow, Wroclaw and Poznan - about € 1500. Among the major cities, cheaper real estate is located in Lodz - on average € 1100 per square meter.

According to the Polish consulting company Reas, in the IV quarter of 2016 the number of transactions with new buildings grew by 25%. At the same time, about 30% of transactions were made by investors wishing to earn money on renting apartments.

The most popular types of objects for investors are apartments for long-term rental to the newcomers and students. In Poland, there is a shortage of similar apartments, rental rates are rising, and the income, according to Reas, reaches 6-8% per year.

Purchasing activity is increasing not only in the capital, but also in other major cities of the country - Wroclaw, Lodz, Tri-City, Krakow. Only in Poznan the number of transactions has not changed.

The real estate market in Poland is focused mainly on local buyers. Ordinary foreigners make here no more than 1% of transactions. But for large investment funds, Poland, according to Colliers, is the leading country in Central and Eastern Europe.

In recent years, there has been a growing demand from private investors from Ukraine and Belarus. Natives of the same countries are also the main foreign tenants in Poland - they regularly come to work and rent apartments in the major cities of Poland.

Price picture of the market

Description of the object

Typical prices

Business Class Objects

Apartment in Warsaw, in the Wola District, near center (Śródmieście), 2-3 minutes by car. Area of the 3-room apartment 64 sq. meters, the fourth floor of a nine-story building. Primary market.

€ 125,000

Apartment in the center of  Warsaw (Śródmieście), Lviv st. The area of the 3-room apartment , 68 square meters, the 1st floor of a four-story building. Secondary market.

€ 170,000 or € 2500 per square meter

Luxurious 3-bedroom apartment well-renovated in the secondary market, Krakow (Stare Miasto), Zyblikevich st., the 4th floor of a five-story building. The area of the apartment is 77 square meters. 

€ 160,000 or € 2100 per square meter

Typical new buildings

Typical 2-bedroom apartment, 47 square meters, new building, in the Warsaw district of Białołęka. Date of the apartment handover is 2017.

€ 64,500

Typical 2-bedroom apartment, 44 square meters in the city of Lodz, Vidzev district, The Pomeranian st. Primary market, the date of the apartment handover is 2017.

€ 51,500

Cheap apartments

2-room apartment in Warsaw, Ursus district, is located on the 4th floor of a four-story building, remade from a former laundry. The area is 27 square meters. There are all city utilities (heating, hot and cold water).

€ 34,500

2-room apartment, located on the 3rd floor of a four-story building, in a good area of Lodz - Retkinia. The area of the apartment is 42.4 square meters, secondary market.

€ 35,000

* for the same amount you can find 30-40-meter apartments in Lodz primary market buildings.

Private houses

In the suburbs of Warsaw, for example, in Piaseczno, which is located 18 km south of the capital, there is a large choice of houses. For example: a house with an area of 150 square meters, 4 rooms, and the outside area of 900 sq. meters. It was built in 1993, the material of the walls is claydite concrete, double insulation, utilities and a garage. 3 km away from the center of Piaseczno.

€ 140,000

Two-storey house with a living space of 380 square meters:  7 rooms, a basement, the outside area: 1,000 sq. meters. Year of construction - 1998, the material of the walls - brick. All city utilities (water, sewerage) are included, there is an Internet and a landline telephone.

€ 315,000

Costs of buying property in Poland

Tax on the purchase of real estate is 2% of the value of the object, but on condition that you buy real estate in the secondary market. When buying a new building, there is no tax.

Notarial services. The fee can be an amount (€ 100-250), and a certain percentage, but not more than 3% of the transaction amount.

Translation service - € 50-150. No matter how well you know the Polish language, it is better to use the services of a licensed interpreter. His personal data is entered into a notarial deed, he is legally responsible for the quality of the translation.

The services of a realtor - from 2.5% to 3.5% of the transaction amount, but more often about 3%. The percentage of compensation should be negotiated during the first meeting with the agent. Remember, bargaining is appropriate here, especially if you speak Polish.

State registration of real estate - about 1% of the transaction amount.

Prospects

According to the statistics of the Oruga Group, the interest of Russians to Poland is minimal - the country does not enter even the TOP-50 popular destinations for purchasing real estate abroad. But the demand from Ukrainians and Belarusians increased (for them, Poland - in the TOP-25). Given the strong economic ties between the countries, as well as the stabilization of the situation on the Polish real estate market, it can be assumed that the number of transactions with Ukrainians and Belarusians is likely to increase.

For now, none of the Polish analysts does not predict a rapid rise in prices. But right now you can earn a lot of money on renting, because there are not enough apartments for rent, especially in large cities. The rental income in Poland is higher than in many European countries. Therefore, the demand for apartments for students and migrant workers will grow. It is also expected to increase the volume of investment in commercial real estate, especially offices.