Polish Property Push

Top of the European house price growth league table is Poland. Values have taken a huge jump in the past year, with the average price increase being a massive 33%. Smart investors who bought a couple of years ago in the country’s capital, Krakow, are celebrating 58% rises, making the city Europe’s top performing city.

Surprisngly, the European market is still buoyant, despite the US property market stagnating. The Royal Institution of Chartered Surveyors in the UK did a survey comparing house price growth rates in 26 European countries. The results showed that most countries saw solid growth figures, above the rate of inflation.

The growth across Europe has surprised some analysts. 2006 was predicted to be a year when the European housing market would finally slow because of interest rate rises, stretched affordability and mass increases in property supplies. However 2006 proved to be another strong year with the only country having a negative increase being Portugal.

Whilst many Poles are headed out of Poland to find an outlet for their varied skills, it seems that many people are also headed into Poland with mainly English investors grabbing property in Poland’s largest cities. Combined with an influx of investors and one of the fastest economic growth rates in Europe meaning many Polish people can now afford to buy their own houses, the housing market has found a surge in prices. Demand is now much higher than supply, again pushing prices up. The city with the largest rise, Krakow, has also benefitted from several international companies opening up offices.

City analysts are predicting that this won’t be the end of the bubble – prices are expected to rise for another 3-4 years at least, so jumping on the Polish property band-wagon now may prove to be a wise investment.

If you are looking to invest, property doesn’t come cheap – a one bedroomed city flat in Krakow will probably cost in the region of £60,000-£111,000. A three-bedroom luxury apartment in Krakow on the main square will be around £650,000. If you are prepared to live slightly further away from the main square, the same apartment will drop by about £30,000-£40,000.

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  1. Bogdan | Feb 7, 2007 | Reply

    I believe Poland does have considerable potential for growth, but I think that star status is also fuelled by the media. Similar evolution is witnessed by most Eastern European countries, Romania (my favourite:) ) and Bulgaria in particular due to their recent EU integration, but you need to shop around a bit for a good deal. It is interesting that the chosen city is Krakow, with a population of about a third of the Polish capital; my view is that comparable price increases could be seen in other similar-sized cities (i.e. reasonably large, but not capitals), it is only a question of mass-media discovering these cities.

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