Good prospects for the luxury property market in Poland

Rising earnings and an improving standard of living mean that the market for luxury goods in Poland is growing year after year. As KPMG research shows, one of the fastest-growing sectors in this segment is property, whose market is forecast to grow by about 23% by 2017 and reach as much as 1.348 billion PLN.

It is worth noting that, like the whole luxury goods market, the market for the most expensive properties in Poland is still in a development phase compared with Western countries. This is due above all to the lower affluence of society, but also to relatively limited supply.

A luxury property: what is it?

For a property to be described as luxurious, a whole range of different factors must be taken into account, the most important of which are a prestigious location, exceptional architecture, rich fittings and a price which is mostly derived from all the other factors. In rankings, however, the price criterion is most often used, which is why it is accepted worldwide that the value of a luxury property starts at a million dollars, and in Poland at a million PLN.

A luxury residence for sale near Bydgoszcz, valued at 17 million PLN. photo: REMAX Gold

– Most luxury properties are located around centres such as Warsaw, Kraków, Wrocław, Poznań, the Tricity or Katowice, that is, in places that are home to the head offices of the largest companies and corporations. It should be remembered that in other parts of Poland, too, we can find real gems in the form of manor houses or small castles worth well over ten million PLN – says Marta Kulawik, owner of the Katowice estate agency REMAX Gold.

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The functions a luxury property can serve

A luxury property serves on the one hand as a home, and on the other, like other luxury goods, it underlines the owner's high social status. It very often happens that people own several expensive properties in different locations. Depending on the location, they may serve as a holiday residence, or as an apartment in the city centre acting as a hotel for the owner and family. In many cases the purchase of luxury property is treated as a very good investment or store of capital.

– Each year about 200 luxury properties worth about 500 million PLN are bought on the primary market, of which about 90% are apartments and only 10% are residences. On the secondary market, the value of transactions is estimated at about 0.8-1 billion PLN, but in reality the amount may be much higher, because many transactions, especially those of the greatest value, take place in secret at the clients' request – adds Marta Kulawik.

Forecasts

Forecasts for the luxury property market are very optimistic because of growing supply and demand, the latter driven above all by the number of millionaires in Poland, which rises year by year. In 2012-2014 alone, the number of Poles with liquid assets exceeding a million dollars grew by more than 31.5%, to over 50 thousand people. Given that as many as 84% of people in this group own at least one luxury property, and 9% declare they will buy at least one a year, we can conclude that interest in this category of luxury goods will keep growing.