CHAPTER TWENTY-FOUR: Property Investing in Poland

Poland arguably attracts more pure investment buyers from Ireland, the UK and Germany than any other country. The largest and best known of the 2004 EU entrants, the difference between Poland and neighbouring Germany was a gulf which buyers expected EU entry to close.

The optimism has been partially justified: economic growth is over 5% and property prices continue to rise at a steady 10% per annum in the major cities. Polish families are expecting better quality residential property and the level of home ownership is rising steadily, increasing from 48% in 1998 to 55% in 2003.

There are difficulties: unattractive grey Soviet apartment blocks still make up much of the housing stock and some new construction doesn’t live up to expectations.

The buoyant market is encouraging developers to build, and Poland’s major cities are now ringed with inexpensive housing. The balance between supply and demand may be shifting towards over-supply of affordable residential property. Exclusive high quality developments are therefore believed to be the best investment.

Is This a Good Place to Buy?

In the 2006 study of potential capital appreciation over the next ten years conducted on behalf of the Channel Four television programme A Place in the Sun, Poland was placed second after Romania. The firm of accountants commissioned by the programme concluded that Polish real estate could offer 393% returns over the next ten years. Poland does present a good opportunity, but this level of growth is unrealistic.

According to the Emerging Trends in Real Estate...