Polish Property and Real Estate Market Report - Summer 2011

Property prices across Poland remain static and this situation has not changed since the start of the Credit Crisis, despite some optimistic and upbeat forecasts from agents. However it is an unusual state of affairs considering many European countries (both Central and Western) have seen large percentage falls.

As has been covered earlier the value of property did not slide because Poland did not go into recession. Instead it's economy continued to grow and as foreign buyers made up a very small part of the market their absence was not noticeable except to the businesses that relied on them solely.

This should mean that prices increase steadily but there are two strong reasons why they are not.

Firstly many buyers have withdrawn from the market while they wait to see how the international scene will shape up. They recognise that no country is an island in a global world so if major economies continue to falter then this could ultimately affect Poland.

Secondly a large number of private Polish investors have also pulled out of the market for the time being. These are buyers who were used to getting 20%+ returns on resales. But now banks are offering 6-8%+ on savings accounts and property prices are static so it is clear to them where cash performs best at the moment.

One part of the real estate market in Poland does seem to be showing more activity than it once did, and that is the purchase of holiday and retirement homes. This trend has been noticed by our Visit Poland and Property Finder services.

As more people make their first visits to Poland, usually as a vacation, they come into contact with the country and it's wealth of attractions, many of which they didn't expect. Couple with this the affordability of property compared to other destinations such as Italy, France or Spain and you have motivated holiday home buyers.

For retirement a UK pension still goes a long way in Poland, much further than domestically. Once again substantial homes can be purchased for much less than traditional retirement destinations in Western Europe. Add to this the continuing growth of English as a second language and a gradually improving infrastructure (such as the East-West A2 motorway, the new international airport under construction in Lublin, etc) and it is easy to understand why more people are considering Poland for their twilight years.

In summary, we do not expect to see any major changes in property prices until there is a stable global recovery along with a reduction in the rates offered by banks to savers. Despite this niche markets may continue to grow.