The national election was felt strongly with the highest turnout since 1989. Poles, fearing the continuation of a government that had done little to help business and make long term economic reforms, voted in their millions. But nothing was certain from the opinion poles that jumped inconsistently from one major party to another so major financial decisions such as home-buying were delayed by many individuals.
At the same time vendors and investors who had revelled in the price growth of 2006 overstepped the mark. In Krakow especially the asking prices of houses rose nearly 40% in Quarter 2 but, being unachievable, they fell back 25% in the Autumn. Cities that had not fared so well in 2006 showed far more realism and thus a much more stable picture. Gdansk apartments, for example, rose 7% (price per square metre) while Lublin apartments dropped nearly the same amount on this measure.
On a national scale however apartments remained steady with prices per square metre up 2% this quarter and 30% for the year as a whole. For this property type it is evident that where you buy is critical if capital gain is the objective.
For houses the situation is very different. House builders have traditionally been smaller firms with the large scale developers concentrating on apartment blocks. The former have experienced, to a greater extent, the shortages of labour and materials this year and have not been able to meet demand.
And for houses demand is ever growing. The Poles are getting richer and given the choice between an apartment or a house they will opt for the latter. But houses, as a percentage of available residential stock, are still decreasing. 43% in quarter 4 of 2006, 28% in Quarter 3 of 2007.
The shortage is reflected with the national price per square metre of houses rising 13% in the last three months. Houses, at the moment, are the properties delivering capital gain and they may remain so until main stream developers start to consider this market more carefully.
In summary the emerging market that is Poland has learnt a great deal this year. Politics can influence prices and greed by vendors is not met enthusiastically by buyers. With this under its belt and a steady political landscape now in place a much more stable future is expected. And capital gain will remain stronger than in most of Western Europe simply due to the large scale investments in the country's infrastructure. However from an investors point of view buyers now need to take more care in where they look and what they look at.
Essential to this new "clever buying" is to consider cities and areas less in the limelight or look at alternative property types. Residential off plan apartments are certainly what the crowd go for but smarter buyers are already looking at houses, apartments on the secondary market, office space and even warehousing. If you are serious about capital gain do not be blinkered and do not believe it can come easily. A little homework will pay off.
For reference when looking at pricing it should be noted that changes in the mix between houses and apartments on the market is dragging average prices down disproportionately and at present it is advisable to use the price per square metre measure.
To learn more about the Poland, the Polish real estate market and what to look for the new book from Mamdom Buying Property in Poland is now available. Click here to purchase your copy.
In recognising the increasing number of foreign buyers that would like to purchase in relatively virgin areas Mamdom provides a number of new services:
Visiting Poland - drivers and interpretors to make your trip effective
Property Searches - identify the right offers before you land
Property Inspections - know exactly what you are buying
Project Management - Shell fit outs and refurbishment of older properties
For a full list of services from Mamdom click here
