Krakow prices stop rising but Poland moves on
Poland stole the limelight in 2006 with the fastest growing real estate prices in Europe and nowhere rose faster than the popular tourist destination of Krakow. But the latest figures show that now, more than ever, buyers need to think carefully about where they buy. Tim Hill from the Anglo-Polish property portal
Mamdom.com looks over the latest figures.
There is no doubt that Poland, as a country, is seeing strong and healthy increases in property prices. The average price per square meter of residential real estate has been moving up steadily at 10% per quarter since the summer of 2006. The good news for foreign investors is that this is not driven by the speculation of international buyers but by the rising wealth of the Poles themselves. The result is that houses and apartments bought, even at these new higher prices, can be rented out or resold to a wide market place.
Krakow had to be one of the first cities to see large scale price rises, its beauty and splendour never fails to capture those who visit it and as sure as night follows day tourism was going to be big business. In the mid 1990s trail blazers found their way there and started purchasing real estate and the market gathered pace. Last year saw some owners benefit from nearly 100% capital gains on their apartments in the old town but if this were to continue a crash would become inevitable. As such the stagnant prices now in the city are seen by many more as a relief than a disappointment. Internationally it is still cheap, but the rest of Poland must catch up first.
Warsaw, on the other hand, never had the advantages Krakow was endowed with but did well to re-invent itself as a commercial centre. With the Polish economy growing faster than its German neighbour large numbers have been steadily drawn to the capital and property prices have been creeping up. At the start of 2007 there were 151 new developments under construction in the city but it’s a drop in the ocean for a city set to double in size over the next decade. Prices per square meter of residential property are steady with increases of 8-9% per quarter and a strong rental market with it.
Other leading cities at the start of 2007 included Gdansk, Poznan and Lublin. Gdansk saw price rises of 13% but apartments rose 16% as the number of tourists to this seaside resort are expected to continue growing for the foreseeable future. Poznan on the other hand is doing well as a commercial centre due to an improving road and rail network with Germany and Berlin. Prices in the western city rose 17% driven especially by a shortage of houses, rather than apartments, as wealthier city residents looked to upsize. Lublin, a medieval city with some 80,000 students in its various universities and colleges saw the price per square meter of apartments jump by 19% in the first quarter of 2007 and is widely seen as one of the best cities for capital gains over the next five years.
So as the media dust settles it is becoming clear that smarter buyers may want to think twice about following the crowd to Krakow. Although undoubtedly there are still gains to be made here better than those in many other European hotspots, there are even more substantial profits to be found elsewhere in Poland.
Full market analysis reports for Poland, Krakow, Gdansk, Lublin, Poznan and Warsaw are available at
www.mamdom.com along with current real time prices and a wide selection of offers from both the primary and secondary market.
