Why it could well pay to go Polish...

Poland has sometimes been viewed as the poor relation in the eastern European property boom. But this is changing, according to Paul Alford, of property investment company Poland Direct (www.poland-direct.com).

Poland has sometimes been viewed as the poor relation in the eastern European property boom. But this is changing, according to Paul Alford, of property investment company Poland Direct (www.poland-direct.com).

'Poland is like a Coke bottle which has been shaken, with all the fizz about to burst out,' says Mr Alford. 'It has a well educated, ambitious population. Hundreds of thousands of Polish are earning plenty of money abroad - money which has got to come back some time. I also think the larger economic powers feel a bit sorry for Poland, especially after the Second World War, and there's a lot of inward investment.'

An average residential property (two-bedroom apartment) in a city can be bought for about €70,000 to €90,000. According to Mr Alford, in the right place, this should bring you a rental yield of between 7 per cent and 10 per cent. When buying in the towns, the holy grail is a property within spitting distance of the town square.

Mr Alford recommends buying new (preferably off-plan) property rather than resale property. This avoids problems over questions of ownership (eg if it turns out the rightful owners were Jews booted out in the war) and avoids the hassle of a particularly annoying Polish custom. Namely, when you move into a property, you have to go with the former owner, in person, to all your utility suppliers (water, electricity, etc) and sign a new contract with them.

Hotspots Krakow (a bit overdone) and Wroclaw (the new Krakow). Last year, property in Krakow recorded gains of 58 per cent. In Wroclaw, meanwhile, prices rose by 9 per cent in January alone. Also: Poznan (near the German border), Gdansk (booming dock city; birthplace of Solidarity); Zakopane (Poland's most popular ski resort); Wisla (obviously…)

One reason why Polish property is a sound bet, according to the very useful Polish property website www.mamdom.com, is the GDP disparity relative to its wealthier neighbours. In next-door Germany, per capita income is five times higher - something that is bound to level now that Poland is part of the EU.

This, of course, makes Poland vulnerable to rampant property speculation, which is why foreign buyers are currently required to have permits, to limit the amount of property they can buy. These permits are being phased out between 2009 (for investment property) and 2016 (agricultural land). They take around two months to obtain (for further details see www.mamdom.com) but are usually granted so long as the investor can show that Poland will benefit (eg employment of local builders, renovation, tourist trade etc).