Investing In Property In Poland

By: Tem Pearson

Heading overseas is part and parcel of the modern property investor's lot - and Poland has not escaped the attention of the more astute investor.

Investing in property in Poland is a choice that is looking more appealing for property investors seeking easy financing options, as well as cheap properties that offer good capital and income gains.

At the moment, the rental market is very much in the emerging category and rental yields are generally around the 4 to 6 percent mark.

Most investments are currently being made in the urban regions of Poland such as Warsaw, Lodz, Krakow and TriCity, although there is an increasing trend towards rural investing and developing, which is gaining momentum thanks to a growing tourist trade.

In 2004, Poland joined the EU along with nine other countries and since then it has offered many more opportunities for external investors. Individuals from other EU countries are now free to buy property in Poland, which has worked wonders for the housing market.

Although entry to the EU is historically the point that house prices start to rise, the process, nevertheless, takes several years and experts believe that Poland still has a lot more to give.

One thing that has been hugely beneficial to Poland is the economic stability that has been forthcoming, after joining the EU. In order to enter the EU, Poland had to ensure that it met the rigorous standards required; furthermore, Poland looks set to enter the European Single Currency in 2010. Meanwhile, Poland's economic status goes from strength to strength and more inward investment has followed, driving house prices upwards.

Having gained this extra economic strength, people are flooding to the region and the capital, Warsaw, is set to see its population double by 2010, a factor which is likely to continue to fuel the property market.

Although the Polish residential market has seen a huge rise in prices, over the last three years, in some affluent areas house prices have risen by as much as 50 percent and analysts believe that the market is still very much on the up.

It is estimated, currently, that there is a deficit of approximately 1.5 million properties and a further 3 million that are in need of renovation. These figures, unsurprisingly, are attracting investors from around the globe.

The Chief Economist from CU Investment Management has suggested that the current trend of increasing prices of 25 percent per annum will eventually drop more towards the 8 percent per annum mark.

Poland is also a wonderful location for investment, as it is the transportation hub for Europe and is, therefore, encouraging considerable inward migration, which is likely to ensure that property prices remain upwardly mobile for years to come. Finally, moving away from the communist era, Poland is not to be overlooked by outward looking property investors.

Overall, Poland makes a superb long-term investment with promising capital gains. However, in the short run, financing may need to be arranged while the rental market gains the necessary strength to support the buy to let market.

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