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. In time, other towns and rural areas should also feel the benefits of Poland's economic development and increasing prominence on the tourist scene. Prices remain low, but EU entry is helping to ensure that this changes.
To attract continued levels of foreign direct investment into all sectors of the economy the Polish government have put in place a series of economic incentives and these include the rebate of real estate tax, the payment of grants and reimbursement of land costs for certain types of investors which is just one more reason why Poland is an attractive prospect for property investors seeking the best opportunities and potential for long term gains.
In 2005 Poland saw a substantial increase in real estate investment volumes. The market is becoming increasingly diverse and liquid, with investors of more nationalities represented, and a lower concentration of activity recorded in the capital city. In total, around €2 bln of modern real estate properties were purchased in Poland during 2005. Yields in all sectors continue to fall sharply due to the increasing volume of investment capital which is competing to purchase a rather a limited supply of institutional quality property. For the top office and retail properties in Warsaw in 2005, investors were required to accept net initial yields of 7% or lower.
The images of Warsaw as a dull concrete jungle, a wasteland of Soviet-era housing with little appeal remain only with those who haven't visited this vibrant city in the past 15 years. The city does undoubtedly have its fair share of problems and whole swathes of its suburbs are indeed dominated by the less-than-imaginative creations of communist-era architects. But there is far more to this metropolis, with a string of things to see, an impressive cultural scene and an increasingly lively nightlife. Warsaw is a real survivor – the city's current day existence, especially as a new addition to the European Union's list of capital cities, is impressive in itself.
Krakow, in the south of Poland on the Vistula or Wisla River, is one of the country's most ancient and most beautiful cities.
With a history that dates back more than a thousand years, Krakow was once the national capital and has been the site of countless occupations, uprisings and border-shifting.
Because of its role in history, it's considered by many Poles to be the real heart of Poland, and has become its biggest lure for tourists. Four UNESCO World Heritage Sites are either in or around Krakow, and more than 4 million international tourists arrive in the city each year.
Acquisition of Real Estate by Foreigners
Generally, the direct or indirect acquisition of commercial property by entities which are "controlled" by foreigners requires a permit from the Minister of Internal Affairs and Administration. However, due to amendments flowing from Poland's EU accession, entities from the EEA area no longer require such a permit. Certain restrictions and transitional rules remain relating to purchases of specific types of real estate (i.e. agricultural land, land located in border zones and second homes).