Published on 09 October 2005 at 02:25 pm
Filed under: Europe:- Poland Property Guides » Poland for Property Investors
The cities of Warsaw and Krakow in Poland offer property investors some of the lowest risk, highest growth potential real estate opportunities in any of Europe’s transitional economies.
As a result of the massive ongoing economic reform program that Poland began back in the 1990s the real estate sector in Poland has really begun to benefit from both foreign investment and local economic expansion and yet it remains an emerging market with low prices and huge room for growth and development. Quite simply, Poland is an incredibly exciting opportunity for property investors right now.
Poland joined the EU in 2004 following more than a decade of strict and harsh economic reform that transformed this once austere and incredibly poor Central European country into one of the most successful transitional economies alongside the Czech Republic.
While some of Poland’s more rural areas remain underdeveloped and deprived and remain the focus of ongoing and targeted reform, the transformation of the fortunes of Warsaw, Poland’s capital city and Krakow, Poland’s third city have been absolutely extraordinary and highlight the potential for the entire country.
Beginning with Warsaw - the capital city of Poland suffered massive architectural damage during World War I and so in essence the city today is a modern one. It was rebuilt after the war with more attention paid to function rather than form, however having said that, the historic districts that remain have been carefully and perfectly preserved and new buildings being created are architecturally striking. As the capital city of Poland Warsaw is the economic hub of the entire country and produces in excess of 15% of the entire country’s income.
Since Poland began EU accession Warsaw has enjoyed substantial vertical foreign direct investment with major international companies such as Pepsico, KPMG and General Motors establishing bases in the city and foreign investors keen to get involved in the financial development of Poland investing in excess of 650 million Euros a year into the city.
Property investors can look to the local and overseas markets for rental and resale opportunities for profit with the local market growing in wealth and the overseas market interest in this city intensifying. Furthermore real estate investors in Warsaw will likely benefit from Poland’s ongoing economic development and the sustained EU financial aid program that will really begin to kick in from 2006.
Krakow in contrast to Warsaw is one of the most striking and beautiful cities in Europe. It is Poland’s third city, a tourist hotspot, a city with an incredibly young and well educated population and now it also has fledgling IT, R & D, education, telecoms, health care, engineering and biotechnology sectors which have emerged and developed as a result of the creation of The Krakow Special Economic Zone.
The Zone was established to offer companies in the above listed sectors financial incentives, taxation breaks and general support to establish their companies in Krakow, create employment, bring investment and lead to the creation of Krakow as one of the leading European centers for high tech industries and so far the development of The Krakow Special Economic Zone has been wholly successful.
The numbers of professional expatriates and students relocating full time to Krakow are significantly on the increase. Property prices between 2004 and 2005 rose by 9% and demand for brand new, off plan apartments in Krakow outstrips supply by up to 40% in some areas. This is a situation that will remain for some considerable time as the population of the city grows, the wealth of the city’s inhabitants pushes up their purchasing power, the supply of land to develop remains restricted and building permissions are hard to get, add to this the fact that property prices are guaranteed to rise with the introduction of VAT on new builds in 2008 and you have one of the most perfect environments for low risk, high growth potential property that is massively in demand!
Warsaw and Krakow are two of the most exciting European cities for property investment potential at the current time, and as economic success stories the two cities simply highlight the future potential of the entire real estate sector in Poland, country wide.
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