Homesgofast.com looks at the case for Krakow to become an Eastern European honey pot for investors. Reports from The Telegraph, Krakow Post and style magazine Vogue all point to the booming potential of Krakow.
Krakow Post report that it is estimated that between 10% and 20% of apartments being bought in Krakow at the moment are destined for the buy-to-let market, with the majority of these units in new developments. Studio flats and two-bed apartments are popular among investors, but by far the most popular for investment is the one-bed apartment (typically around 40–50 square metres).
The rush to buy property as an investment in Poland is largely related to record low Polish interest rates, and the lowest capital values for property since 2005. Savings otherwise languishing in savings accounts are attracted to higher annual returns from rental properties (with the perspective for future capital growth). Inevitably, the increased supply of new rental properties on the market will prevent rents from rising but there is not expected to be any downward pressure on rents either. Many investors are also taking advantage of the low-interest rates by leveraging their investments with bank borrowings – effectively getting their future tenants to pay the mortgage with the monthly rent.
Nick Marr founder of Homesgofast.com
“Krakow is Poland's second largest city and lies towards the southern border of the country. Krakow contains approximately 2 million works of art and the medieval city centre is considered a World Heritage site. It reminds me of East London in the UK where now the hipsters roam, start ups build and rental prices have gone through the roof"
In a Vogue article ‘Why Eastern Europe Will be 2017’s Hot Travel Destination’ it says
“Consider Poland, where Kraków is a fusion of a gorgeous preserved medieval-era historic center with an energetic nightlife and the deep, haunting Wieliczka Salt Mine just a quick jaunt away. The country has a rich arts legacy, as underscored by Wroclaw’s 2016 European Capital of Culture Awards. The year also saw the release of VeryGraphic: Polish Designers of the 20th Century, a book chronicling the expansive history of Polish graphic design, and the opening of the exhibition-filled Centre for the Meeting of Cultures in Lublin. Warsaw, rebuilt after significant World War II–era damage, draws raves for a slew of attractions like the Neon Muzeum. When the city’s circa-1857 Hotel Europejski transforms into a luxe Raffles property in 2017, Ezon predicts it will be “a game-changer.”
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The Telegraph reports
It might seem a bit counter-intuitive to invest in Poland when so many Poles have moved in the opposite direction. But EU infrastructure funds are pouring into the country, and many multinational companies are investing there. Property in blue-chip cities such as Krakow, a fabulous destination in its own right, is starting to look like good value. This buoyant country is proof that, while certain overseas destinations remain evergreen, there is always room for punchy newcomers on the global property ladder
House prices in Krakow Poland
According to the Polish central bank, Narodowy Bank Polski (NBP). During the latest quarter, house prices were up by 0.1% (0.8% inflation-adjusted).
In Warsaw, the country’s capital, the average price of existing houses increased slightly by 0.6% (1.6% inflation-adjusted) y-o-y in Q1 2016.
Bydgoszcz recorded the biggest increase in house prices of 5.2% (6.2% inflation-adjusted) during the year to Q1 2016, followed by Gdańsk, with a 3.5% y-o-y increase.
Other Polish cities with minimal house price increases included Lublin, with a y-o-y growth of 2% in Q1 2016, Poznań (1.5%), Białystok (1.5%), Szczecin (1.4%), Gdynia (1.3%), Opole (1.1%), Wrocław (0.6%), Łódź (0.4%), and Olsztyn (0.1%).
Kraków saw the biggest house price decline of 2.9% (-1.9% inflation-adjusted) during the year to Q1 2016, followed by Zielona Góra (-0.9%), Rzeszów (-0.8%), Kielce (-0.7%), and Katowice (-0.2%).
House for sale in Krakow