Investing in Poland Property

Country:  Poland

For an ex-Soviet satellite state that tasted freedom as recently as 1989, Poland's realpolitik chutzpah is to be admired. Now one of the most successful transitional economies in Europe, the arrival of designer capitalism into this Eastern bloc heartland has been swift and dramatic - heritage towns now absorbing a "no frills" influx of city slickers, while age-old hamlets untouched by progress steel themselves for a holiday-home gold rush. EU accession in 2004 has attracted significant foreign investment, with a confident banking sector, young urbanizing population, and 'blue-chip' presence completing the cocktail for growth.

Ranked fifth in the global FDI index, which assesses how likely investors are to divert capital into a country, Poland's long-term economic performance also looks set to outshine many of its EU rivals, as Judi Williams of Property Frontiers explains: "As a country, Poland is attracting enormous interest from pure investment buyers, with economic growth at over five per cent, and property prices rising in the region of ten per cent per annum, higher in key cities."

Domestic appetite for ownership is also gaining momentum. "With an emerging indigenous middle class, and widening portfolio of new-build developments around the major cities, both the wealth to rent and to buy is increasing," adds Sam Reynolds of Property Secrets. As to best investment buys: "Most agents will advise either off-plan or old," suggests Williams. "Character properties are an excellent choice, with turn of the century city apartments holding their value well. Buyers however, should look carefully at the potential supply/demand matrix in each micro location. property in Poland is a good bet for capital growth, but can be less so for those seeking a secure, high-income stream."

Tri-City

Following in the footsteps of Warsaw, the northwestern coastal collective of Tri-City (Gdansk, Gydnia and Sopot) is now grabbing its slice of the investment pie. "Sopot is firmly on the overseas investor radar," explains Tom Leach of Leach Property Consultants. "Land is pricier, but it's a known quantity on the domestic front, which will appeal to the more cautious investor." Fashionable in the 17th century with a whelks-and-windbreaks feel to it today, the lively Bohaterow Monte Cassino main drag reflects its 'summer capital' status, the Hel Peninsula making the water warmer than elsewhere along the Baltic. Property in Poland is marketing one-bedroom apartments for £155,000 in an attractive complex, just minutes from the beach. On-site facilities include a gym and children's play area.

Close-by, Gdansk old town has been sympathetically restored to its pre-war glory complete with grand stone gateways and burgher houses. "Direct flights from London and other European destinations will undoubtedly boost its tourist profile," adds Louis Mann of Validus, "with more routes scheduled for the coming year." Located in the Wrzeszcz district, Property Frontiers are marketing Bretowska Brama, a triple tower residence housing 163 deluxe apartments with on-site gym and sauna. Prices for a one-bedroom apartment start from £50,000.

Property in Warsaw

Traces of a Soviet-era wasteland are hard to spot in downtown Warsaw today. Tell tale signs do however remain in the suburbs - swathes to the east still dominated by concrete monolith dwellings. Most of the city's attractions lie on the West Bank of the Vistula River, a lightened atmosphere of cafes, green spaces, and museums thronging with life. Residential property is rising by an average of 15 per cent, with some of the fancier districts reaching 30 per cent, demand for 'let-friendly' two-bedroom apartments overtaking prestige penthouses.

"Rental yields of upwards of ten per cent are typical," confirms John Osborne of Osborne Property. Gearing to buy is also straightforward confirms off-plan investor Peter Richardson: "as the mortgage market is established." Warsaw's other draw card is access, with upwards of seven million passengers a year into its airport and Terminal Two now under construction. Prime districts include Bialoleka and Wesola, together with Ursynow. Local agents Maxon's selection of re-sale properties in the district includes a renovated redbrick villa with secluded gardens for £225,000.

Property in Zakopane

Nestling in the foothills of the Tatras Moutains, Poland's official 'winter capital' has come a long way from its bear steak and caving days. Attracting over two million tourists a year, the region's four downhill areas include the challenging Kasprowy Wierch, accessed by a stoic two-stage cable car. Lacking the cafŽ creme artery of its Alpine counterparts, Zakopane more than holds its own for slope side charm, a pretty river running alongside the car-free main street of Krupowki. "Poles own holiday homes here, so values have remained steady," says Nick Dare of Dare Property. "The ski season is long, with hiking, rock climbing and fishing bringing an active rental window of around eight months a year." Apartments sell for around £85,000, while traditional chalets fetch upwards of £160,000, prestigious Koscielisko commanding a premium.

Access is also good from Poprad airport in neighbouring Slovakia, with a new motorway intersection being built from Cracow airport, which will cut transfer time down to around an hour. On the market with Sunshine Estates for £1.5 million is a tastefully renovated two-storey villa comprising five apartments, ideal for a pension conversion. A turnkey alternative with Offplan Investment Property is the Pod Reglami Residence close to Malej Laki Valley. One-bedroom wood and stone finish apartments with gable roofs start from £50,000.

Property in Lodz

With the surrounding backdrop of the Sulejowskie and Jeziorsko Lakes, and the opening of a high-speed rail-link from Warsaw cutting commute time to just 45 minutes, property interests are hotting up in Poland's second tier city. Creative remodelling of downtown tenements and factory buildings has also struck a chord with overseas buyers: "particularly loft-style conversions in renovated warehouses," says Reynolds. "Buy-to-let isn't big as yet, but it's where the market is heading-investors looking long-term to cover their on-costs through rentals." Property prices at around £430 to £560 per square metre are competitive, around half those of Warsaw and Cracow. Overlooking two palaces and a lake, the 19th century landmark Cotton Mill is being sympathetically converted into luxury apartments. Prices with Property Secrets start from £50,000 for a one-bedroom apartment, rising to £100,00 for three bedrooms.

Property in Wroclaw

Top contender for the 'new' Cracow slot, a new Ryanair service is fuelling second-home sales with unit prices for new-build up by an average of 12 per cent. Perched upon the Odra River, the city's soaring spires and central maze of islands and bridges make for a scenic 'city break' vista. "Close proximity to Germany and the Czech Republic has bolstered blue-chip presence," says Patrick O'Connell of European Property Links, "with some developers starting to offer pre-lets on off-plan properties, as buy-to-let investors are unlikely to struggle finding tenants." On the market with the agency is Park Garden Residence, a stunning cascading design development of 100 apartments overlooking the city's park. One-bedroom apartments start from £70,000, rising to £120,000 for three bedrooms. Boasting a secluded riverbank setting, Property in Poland has a stately 18th century palace for conversion, with stables, and barns. The asking price is £433,000.  

Property in Cracow

One-time royal capital and now resurgent tourist destination, Cracow's attractions are manifest-towers, intricate courtyards, and a green-belt Oval City Park. "Popular districts include the Stare Miasto (Old Town) and arty Kazimierz (Jewish Quarter)," confirms Osborne. "Short-term student and tourist rentals are plentiful with average yields of between six to eight per cent." Up and coming districts include leafy Rakowice and Kleparz, and Debniki to the southwest, a good bet for small villas and post-war townhouses. Located in Wola Duchacka south of the city centre, Sunny Hill is a stylish multi-residence development with views over the Tatra Mountains. One-bedroom units start from £54,000 rising to £62,000 for two-bedroom units with Property Secrets. An eye-catching alternative on the site of a textile factory is Vistula. Due to complete in 2009 one-bedroom apartments with Leach Property Consultants start from £100,000. Leaseback options are available.

First published in April 2007.
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