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Poland's blue-chip market enters a new development phase - excellent news for property investors

Warsaw is the largest and most developed market in Poland.

So, has the city seen as much growth as it will or is there still potential there?

At Property Secrets, we believe Warsaw has entered a new development phase and has lots of future potential for investors; that is why we have just launched the Warsaw Property Market Profile, which highlights exactly what the city has to offer today.

Why Warsaw?

Warsaw is the leading city in Poland and the centre of business, political and cultural life. All the economic indicators show that Warsaw has the strongest economic background of all the major Polish cities: the highest GDP per capita, the lowest unemployment, the highest FDI inflow and wages growing at the fastest rate.

Warsaw is also one of the most attractive Central Eastern European capitals to locate business in due to its strategic geographical position in the region and its highly qualified and relatively cheap workforce.

For all those reasons, the Polish capital city qualifies for blue chip status. It has a quality market with excellent prospects for future growth and development.

Warsaw's residential market was the first in Poland to take off. Since 2004, the market has boomed due to increasing affordability for the local middle classes and huge demand outstripping supply.

We believe the market has stabilised since then, which is something that Warsaw's property market needs right now. It is also a sign that the market is developing and is healthy, which means it is a safe, low risk bet for property investors.

Why is Warsaw such an attractive investment?

• It is the largest and the most developed market in Poland
• All components for sustained growth are in place, but the purchasing power of locals is decreasing
• The market is stabilising after rapid price growth in the last two years
• Price growth has temporarily slowed down to around 10% - 15% per year which is expected to continue for the next 18 months
• Strengthening rental market
• Developing mortgage market

The 61 page guide aims to answer all your questions about Warsaw and why you should be investing there now, including an economic snapshot, information about the property market and maturing mortgage market in Warsaw, as well as buying and selling property in Warsaw, followed by an overview of where the city should fit in your property portfolio.

Excerpt, p56...

Warsaw is a city that is set to grow fast and leave many parts of the country lagging behind, just as Madrid led the economic and population explosion in Spain in the early 1980s.

Warsaw was the first city in Poland that recovered and went through significant changes after the end of Communism in 1989. EU membership has been the single most important boost for economic development in Warsaw and the country.

Having established its position as the country's premier city and strongest economic centre, Warsaw was one of the first cities that benefited from EU accession.

Poland and Warsaw are still emerging markets, which means that while the economy shows signs of strong growth and the macroeconomic outlook is stable, there is still a great deal of potential for growth.

One of the biggest recent economic stimulators for Warsaw is Euro 2012 and the decision for the tournament to take place in Poland and Ukraine.

What is happening in the mortgage market in Warsaw?

All these questions and other are answered in much more detail in the Warsaw Property Market Profile, but in brief:

Increasing demand for mortgages has resulted in extremely strong competition between banks, forcing them to introduce more products.

Almost every commercial bank in Poland offers mortgages and the market is becoming ever more sophisticated.

Banks in Poland have significantly improved their lending conditions in the last two years.

They have increased LTVs to 100% and some banks offer even higher LTVs to cover the cost of transactions. Repayment terms have been extended to 40-50 years.

How does this affect mortgages for non-residents?

Excerpt, p 46...

Mortgage products for foreigners are available from Polish banks. However, non-residents should expect generally lower LTVs and a shorter repayment term.

The LTV is usually 60-85% and terms are 25-30 years, subject to status.

The interest rates are the same as for locals. An added 1% on the top of the interest applies until the property is registered.

To find out exactly how you can apply for a mortgage in Warsaw see the four step procedure in the market profile

This market profile ensures that every question is answered and you are completely aware of all the issues and how to overcome them when entering into the Warsaw property market.

Another consdideration, covered in this profile, is how you will go about buying and selling your property in Warsaw.

When owning property there is no cadastral tax in Poland, but there is a real estate tax independent of the value of the property.

Real estate tax levels are defined by the local councils and are subject to limits set by central government.

Rents in Poland are not regulated and can be freely agreed between a landlord and a tenant. A tenancy agreement could be signed for a limited or unlimited period. If the contract is for more than a year, it must be in writing.

Property sales in Poland are subject to Capital Gains Tax, if sold within five years from the end of the tax year when the property was purchased.

The Polish Parliament adopted a pure Capital Gains Tax at the end of 2006, which came into force on 1 January, 2007.

According to the current tax law, taxation on the sale of property acquired after 31 December, 2006, is subject to 19% tax on the capital gain.

The final section of the profile aims to establish exactly where Warsaw should fit in a property investment portfolio.

Excerpt, p56...

We should not expect that growth rates of 30-40% will be repeated in the next year or so. Does this mean that Warsaw has less to offer than other faster growing locations?

Certainly not! We believe Warsaw is an extremely attractive investment location because it offers a great combination of good capital growth, low risk AND now an increasingly developed rental market.

By good capital growth, we mean 10%-plus, per year, in the next 18 months with strong expectations of a rise to 15-20% after this period of stabilisation.

Download the Warsaw Property Market Profile TODAY and you really will be an expert on this market, know all there is to about investing in Warsaw and how to make the most lucrative profits in this developing market...

Click here to download it now