Overview of the Polish real estate market
Kasha, Monday, 11 November 2013
This article is part of a series of 6 articles about buying property in Poland. The other articles in the series cover the following topics:
Foreigners are increasingly interested in buying property in Poland. In the past five years, foreigners bought approximately 21,700 apartments and in 2012 they bought roughly twenty-five percent more apartments in the previous year. Fifty percent of real estate purchases by foreigners are done by Germans, Spaniards, Ukrainians, Britons and Irishmen. Foreigners mostly buy apartments in the Mazowieckie voivodship (40% of all purchases) followed by Malopolskie, Pomorskie and Dolnoslaskie voivodships. They typically look for property in large cities such as Warsaw, Cracow, Wroclaw, Gdansk, Poznan and Lodz. These are the cities that have the biggest turnover and where it is the easiest to buy, sell and rent out property.
The most commonly purchased properties are two-bedroom apartments. (49.8% of all property buyers in Poland look for a two-bedroom). The price of each apartment will fluctuate based on the property location, its construction year and the standard of the interiors finishing. An average two-bedroom apartment in Warsaw will cost around PLN 405,000 (EUR 97,800). The smallest apartments (up to 30 square meters) will cost on average PLN 251,000 (EUR 60,000) with an average price of PLN 8,100 (EUR 1,935) per square meter. Two-bedrooms sized between 31-40 square meters will cost approximately PLN 7,900 (EUR 1,890) per square meter. As the size of the two- bedroom increases, so does the square meter price. Apartments bigger than 90 square meters will likely cost more than PLN 1 million (EUR 239,000) which translates into a square meter price of PLN 11,000 (EUR 2,630) and more.
The absolute highest average real estate prices in Poland are in Sopot with a price of PLN 9,350/EUR 2,230 per square meter, followed by Warsaw (PLN 8,260/EUR 1,970 per square meter) and Cracow (PLN 6,815/EUR 1,630). Gdansk, Wroclaw, Gdynia and Poznan have the next highest average prices and they are ranging between PLN 5,430-5,890 (EUR 1,300-1,400) per square meter.
There is an observable trend for the listed apartment prices in large Polish cities to go down. In the past five years, prices went down by 10-15% across the board and by even up to 28% in larger cities. The average property prices are currently lower by 3.4% than a year ago and lower by 7% than two years ago. The biggest, two-digit price drops have been noted in Gdansk, Wroclaw, Kielce, Lodz and Szczecin.
For those considering purchasing real estate in Poland, it is advisable to finalize their purchase still this year or as soon as possible. There are five good reasons to do so. Firstly, due to the recent lack of demand, the real estate offer is wide and attractive, allowing the prospective buyers to find good deals. The prices are currently bottoming out at their 2007-2008 level and some upward market movement is being observed, meaning that this is probably the best moment to invest in property. Additionally, home loans are currently at their absolute lowest, with the interest rates at approximately 4.25% and there are still some banks willing to finance 100% of the purchase price. In the next two years the obtainability of credit will be worse, with the incoming restrictions on the share of down payment (starting in 2014 the buyers will need to down pay at least 5% and in 2015 at least 10% of the property value). Although for the most part foreigners cannot obtain 100% home financing in Poland, it may be the case that after the stricter down payment regulations are introduced, the loan terms for foreigners may worsen. Finally, it is expected that starting in 2014, the property prices will start picking up, not in the least because at the current level of property prices and low interest rates, investors started entering the real estate market and buying up property for rent.
This article is part of a series of 6 articles about buying property in Poland. The other articles in the series cover the following topics:
Foreigners are increasingly interested in buying property in Poland. In the past five years, foreigners bought approximately 21,700 apartments and in 2012 they bought roughly twenty-five percent more apartments in the previous year. Fifty percent of real estate purchases by foreigners are done by Germans, Spaniards, Ukrainians, Britons and Irishmen. Foreigners mostly buy apartments in the Mazowieckie voivodship (40% of all purchases) followed by Malopolskie, Pomorskie and Dolnoslaskie voivodships. They typically look for property in large cities such as Warsaw, Cracow, Wroclaw, Gdansk, Poznan and Lodz. These are the cities that have the biggest turnover and where it is the easiest to buy, sell and rent out property.
The most commonly purchased properties are two-bedroom apartments. (49.8% of all property buyers in Poland look for a two-bedroom). The price of each apartment will fluctuate based on the property location, its construction year and the standard of the interiors finishing. An average two-bedroom apartment in Warsaw will cost around PLN 405,000 (EUR 97,800). The smallest apartments (up to 30 square meters) will cost on average PLN 251,000 (EUR 60,000) with an average price of PLN 8,100 (EUR 1,935) per square meter. Two-bedrooms sized between 31-40 square meters will cost approximately PLN 7,900 (EUR 1,890) per square meter. As the size of the two- bedroom increases, so does the square meter price. Apartments bigger than 90 square meters will likely cost more than PLN 1 million (EUR 239,000) which translates into a square meter price of PLN 11,000 (EUR 2,630) and more.
The absolute highest average real estate prices in Poland are in Sopot with a price of PLN 9,350/EUR 2,230 per square meter, followed by Warsaw (PLN 8,260/EUR 1,970 per square meter) and Cracow (PLN 6,815/EUR 1,630). Gdansk, Wroclaw, Gdynia and Poznan have the next highest average prices and they are ranging between PLN 5,430-5,890 (EUR 1,300-1,400) per square meter.
There is an observable trend for the listed apartment prices in large Polish cities to go down. In the past five years, prices went down by 10-15% across the board and by even up to 28% in larger cities. The average property prices are currently lower by 3.4% than a year ago and lower by 7% than two years ago. The biggest, two-digit price drops have been noted in Gdansk, Wroclaw, Kielce, Lodz and Szczecin.
For those considering purchasing real estate in Poland, it is advisable to finalize their purchase still this year or as soon as possible. There are five good reasons to do so. Firstly, due to the recent lack of demand, the real estate offer is wide and attractive, allowing the prospective buyers to find good deals. The prices are currently bottoming out at their 2007-2008 level and some upward market movement is being observed, meaning that this is probably the best moment to invest in property. Additionally, home loans are currently at their absolute lowest, with the interest rates at approximately 4.25% and there are still some banks willing to finance 100% of the purchase price. In the next two years the obtainability of credit will be worse, with the incoming restrictions on the share of down payment (starting in 2014 the buyers will need to down pay at least 5% and in 2015 at least 10% of the property value). Although for the most part foreigners cannot obtain 100% home financing in Poland, it may be the case that after the stricter down payment regulations are introduced, the loan terms for foreigners may worsen. Finally, it is expected that starting in 2014, the property prices will start picking up, not in the least because at the current level of property prices and low interest rates, investors started entering the real estate market and buying up property for rent.
All types of property for sale in Poland by private sellers and estate agents. Find your villa, farmhouse or apartment in the Mazowieckie, Malopolskie, Pomorskie or Dolnoslaskie region.
It is possible for foreigners both to buy and finance property in Poland, although the requirements and terms may vary based on the nationality,
residency status and the type of property sought. For those considering purchasing real estate in Poland, it is advisable to finalize their purchase as
soon as possible. There are three good reasons to do so: 1) varied and attractive offer; 2) low prices, which are expected to start picking up in the
next year; 3) attractive interest rates and lo