Tarnów, Wałowa 10 Budynek Banku / Bank Building by Motilla (own work),
Kraków - Juliusz Słowacki Theatre by Night by Lestat (Jan Mehlich) (Own
work) via Wikimedia
PROPERTY VALUES IN POLAND
Q. What are property values
A. Most of the nationalized or expropriated properties we recover are
buildings or urban land. Taking into account the surface of
property, in major Polish cities (e.g. Gdańsk, Kraków, Łodź, Poznań,
Wrocław) property values are
comparable to smaller to mid-size American
cities, considering that the average technical standard of dwellings is
In Warsaw, the capital city of Poland, real estate values are much
higher than in the other major Polish cities.
In Poland, lodgings are typically sold on a per-square-meter
living surface (1m2 = 10.76 ft2), commercial
surface is also typically
sold on a per-square-meter basis. Premises in buildings, other than new
referred to as the “Secondary Market”
wtórny). The value of
recovered buildings, typically older apartment buildings (kamienice)
sometimes with store-front commercial premises, is
determined by this Secondary Market. As a very rough guide, lodging
prices in this market range from $70 to $300 per square foot,
highest prices in Warsaw.
Real estate prices have increased in Poland since we put the above
orientation figures on our website in September 2013. However, since
then the US Dollar has significantly appreciated versus many other
currencies, including the Polish Złoty. For simplicity we are not
adjusting these orientation figures at this time (spring 2016).
On the Secondary Market, commercial surface (store front and
the first floor) can be worth
several times more than residential space. For orientation purposes,
prices can be
researched in Polish and English on the Internet.
It should be noted however, that parties promoting properties to
foreigners often advertise higher prices.
While the value of urban properties in Poland started
shortly after the fall of Communism in 1989, the value of agricultural
land has risen mainly since 2005, when Poland joined the European Union.
There is a general expectation in Poland and elsewhere in
Europe that the standard of living and
real estate values in Poland will continue to move towards Western
Q. What determines values of
recovered properties in Poland?
The market makes no distinction regarding the provenance of empty lots.
Recovered pre-war buildings, as mentioned, are a part of the Secondary
Market, which to a large degree, determines their values.
Some of the factors which drive this Secondary Market are different
than in North America, including the following:
- Poland is an old country, and there are strong heritage and
cultural restrictions on building permits throughout Poland. Also until
recent years, mortgages were not easily available in Poland. These
factors, and the reluctance of Polish people to take on debt, resulted
continuing shortage of reasonably priced lodgings, and very
high free market rents. To this date, run-down apartment buildings, for
there would be no renters in North America, are fully rented in
- As a rule, pre-war buildings, including those built after
WW1, have a lower technical standard than buildings erected in very
recent years (last 10 years or so), for instance they have no elevators
or garage (or parking spaces). Yet, also as a
apartments (flats) in pre-war buildings are larger than those built
during the Communist era, many of which have a surface of only 30 to 40
m2. These larger pre-war units are more marketable.
- When several heirs inherit interest in a particular
property (“joint heirs”), each
of them inherits a fractional ownership
(udział, a share) of that
property. But, it is not as if that heir owned condos in a
building or a share in a housing cooperative — with an udział there is no physical
subdivision of premises. A party who buys an udział from only one of the heirs
still has to obtain a physical subdivision of premises, has to buy out
the other co-owners also, or has to live with the unwieldy arrangement.
- For these reasons, joint
heirs should sell their shares together after recovery.
When they do not, usually a significant discount applies to sale of
their fractional interests; 25% to 30% is
a good first approximation. However, not always. In two cases, we
recovered and sold the clients’ fractional
interests at only a small discount to an investor who was buying up
fractional interests in the area, with a view to redevelop the
- In a recovered pre-war building, an empty apartment may be
more valuable than a rented one because some of
the rented ones are controlled-rent units (mieszkanie kwaterunkowe or mieszkanie komunalne), with very
rents accorded to some old tenants by the municipality or the county.
- However, controlled-rent is being phased out in Poland by
law. Once dominant, it presently represents a small fraction of the
total Polish lodging market. In addition, a 3-year notice generally
suffices to convert a controlled-rent unit to a market-rent unit, and
some controlled-rent tenants accept cash settlements to vacate premises
- Some of the recovered kamienice
buildings are luxury buildings, typically constructed in the first
decades of the 20th century. In the early post-war period, under
Communism, large apartments in such buildings were
often crudely subdivided into several units. Fine woodwork and marble
painted over and so on. Nowadays, it is fashionable in Poland to
“revitalize” such buildings by restoring them to their former splendor,
in order to sell the large apartments in them as luxury condos.
Apart from the above unique factors, location, location,
location, the size of the property and its
technical standard are the key factors which
determine its value.
The drive toward home ownership is very strong in Poland. Around 84%
own the apartments they live in, either directly or through
co-operatives. (In the USA, the percentage is around 65%.)
Also many store owners purchase the storefront premises
they operate from. This is particularly common in the better kamience buildings.
For these reasons, as a rule, recovered properties, including
fractional interests, are highly marketable in Poland.
Poznan street scene by Christofer John SSF (Flickr)