Buying real estate in Poland

In the article, we describe in detail the current state of the real estate market in Poland and why is it worth conducting both legal as well as technical audit with experienced lawyers and engineers from Pewny Lokal company.
We are an engineering company supporting buyers in a technical acceptance of a house or a flat. We are also a law firm specializing in legal audits of real estate.
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Real estate investments in Poland - buying flat in Poland

Pewny Lokal is leading Polish company offering legal and technical (engineering) audits of real estate (flats, houses etc.) on both primary as well as secondary market.

Nowadays the real estate market is blooming. The sector is not only developing at the very high pace but the trend seems to continue. The market has a great potential, attracting many domestic and foreign investors, who appreciate the favorable conditions on the market. Polish real estate market is perceived by them as being perspective, safe, with the relatively high liquidity and the investment in Poland as generating higher rate of return than similar investments in Western Europe and South-West Asia. 

Such a positive situation on the market and the perception of the sector by foreign investors is caused by many factors. 

One of the major causes of such a state is the fact that Poland is considered to be one of the fastest-growing economies in the European Union. According to McKinsey & Company since the EU accession in 2004, Poland has grown around 3 times more than the EU average at the same time being the only country in the European Union that has noted the growth every year since joining.

The next key factor is growing salaries, which contribute to the higher standard of living, thus growing demand for properties.

Another major cause constitute the occurrence of extremely low interest rates – the lowest ever recorded on the Polish  market, according to the National Bank of Poland. Low interest rates encourage purchasing on credit as an investment. Indeed, it constitutes an attractive investment as the real estate market is a safe sector, resistant to recession and economic turmoil.

The next major factor is the development of the rental market. All of the dozens of major Polish cities note the annual rate of return of more than 5%. Therefore, it is not surprising that, according to JLL, in 2017-2018 about 40% of apartments on the primary market were bought for renting.

Indeed, the Polish market is greatly developing comparing to other European countries. According to the EY, Poland is the biggest real estate investment market in the Central and Eastern Europe when it comes to the value of transactions – in 2018 it generated EUR 7,2 billion. 

Residential market in Poland - buying apartment in Poland

The residential market in Poland is growing very fast. It is reflected by both growing demand and increasing prices of flats on the Polish market. According to Eurostat, Poland is ranked in the top 10 European Union countries that have noted the biggest growth on the residential market and the prices of flats on the primary market have increased by 6,7% during the year. 

Even bigger growth has occurred on the secondary market- here the prices of flats grew by 9,4% comparing to the last year. 

How to buy an apartment in Poland

The development of the residential market (both primary and secondary one) is especially visible on the example of the six major cities where the demand for the flats is the highest: Warsaw, Tri-city, Cracow, Wrocław, Poznań and Łódź.

Among the mentioned cities, the highest visible growth occurs in the capital of Poland - here the market grew by 7% in the comparison with the last year. Warsaw constitutes the most developed market in Poland in terms of primary market, as well as secondary one. The prices of the flats here are also the highest compared to other Polish cities. The starting average price for the new flat in Warsaw are record-breaking- equates 10,400 PLN per square meter. According to JLL, in 7 out of 18 districts of Warsaw the price exceeded 11,000 PLN per square meter. In the case of the secondary market in Warsaw the average price of the flat equates 10,412 PLN, as on the primary market.

The prices of flats are expected to grow, according to the experts. The growing prices are caused by the supply that do not meet the high demand, related to the decreasing availability of the land and significant growth of construction prices.

Nevertheless, even such a high and growing prices do not discourage the buyers from buying the flats. The city of Warsaw is constantly developing. More and more people decide to stay in Warsaw, as it is the city with the highest income level in Poland and with the best career opportunities. The owners of the properties in Warsaw, who decide to rent the flat may expect the rate of return on the level of 6,7%. 

The growing immigration of citizens of Ukraine, increasing level of salaries, low interest rates and the possibility of using the property as a profitable investment make the Polish residential market extremely attractive, even despite the occurrence of growing prices. 

The Polish residential market attract not only the Poles but also more and more foreigners, who, taking into account the favorable conditions on the Polish market, decide to purchase a flat for the personal use, or for the use of a very profitable investment. According to the Ministry of Interior and Administration of Poland, the foreigners bought 7,043 flats in Poland in 2018, which means the growth of 46% in comparison with the last year. The citizens of Ukraine are the leaders in buying the flats on the Polish residential market, comparing to other nations. They bought 110,4 thousand of square meters in 2018, which is 55% more than in 2017. The three most attractive cities in Poland for foreigners, from the biggest to the lowest area of the flat bought by them, are respectively: Warsaw, Cracow and Wrocław.

Homebuyer survey in Poland

Many buyers decide to buy more spacious, finished, ready to move in house, often in the suburbs and the more peaceful districts of the city. 

According to the data from the 2018 “Polish real estate” report published by Gratka.pl - one of the leading classified ads portal in Poland, Poles were the most interested in buying the 150-160 square meters, one-storey detached house with an adapted attic. 

The average prices of houses on the secondary market have reached around 500,000 PLN up to 1,900,000 PLN depending the city. The highest average prices of houses on the secondary market were recorded in Warsaw. Here, the average price for a detached house equates 1,900,000 PLN. 

What is worth noticing, the price of the house depends not also on its type. Terraced houses and semi-detached are usually about 10-15% cheaper than detached houses.

The factor that is crucial for the buyers in the Polish market is the location. The buyers interested in the house purchase highly value the proximity to the access roads, institutions or shops.

Another important feature of the house is its year of construction. According to Metrohouse- one of the leading Polish real estate agency, the majority of  Poles (55%) make the purchase of the house built not earlier than in 2010. In many cases it allows for avoiding many additional costs- often related to the e.g. replacement of the old elements of the house, renovation etc.

What is interesting, there is a growing popularity of the so-called villa districts in the biggest Polish cities. The districts are especially common in Warsaw, e.g. in the Wilanów district. 

Analysis of the property development contract

The purchase of the flat or a house constitute an important decision as it is connected with the significant contribution and sometimes even a legal obligation in the form of long-term loan.
Because of that is worth to make sure that the bought flat or house is free from any hidden, troublesome legal entries or any technical defects. The best way to do so is to entrust the assessment of the legal and technical aspects of the bought property to the experts from Pewny Lokal company. We offer complex, high-quality legal and technical services both on the primary and secondary market. Our extensive knowledge is backed up by the experience of conducting flat surveys in 15 Polish cities. Only this year alone, Pewny Lokal performed its services to more than 8200 clients.

We offer legal analysis of the property development contract and the developer’s prospectus. For an additional fee, we can also check additional attachments of the contract, such as a reservation contract or a draft contract transferring ownership of the premises. We offer complex service - when checking documents from a real estate developer, we use not only legal knowledge but also collected statistical data, which allow us to assess the security of the development investment (e.g. through checking whether there are any potential negative information published in the press about the residential developer). 

The report that we prepare consists of four parts. The summary focuses on the most important information that you should pay attention to. “Investment in a nutshell” contains key information about the development. “The contract in the nutshell” contains a summary of the property development contract and the additional documents, e.g. a reservation contract. “Explanations” part includes the description of the information from the previous parts of the report and the recommendations (e.g. concerning specific contractual clauses and how you should renegotiate them).

We send your uniform and transparent report within 48 hours since ordering. Consultation with a lawyer is also an option for additional fee. Such a process, combined with the experience in the real estate sector and the constant monitoring of the changes in the law in this field allow us to provide you with the service much faster and more efficiently that the law firms.

Technical audit of a flat and a house on the primary market 

The process of buying an apartment on the primary market begins with the signing of the so-called developer agreement (sometimes also the so-called reservation agreement in advance). Usually, when the property developer contract is concluded, the investment is not ready yet.

Therefore, the buyer undertakes to buy the apartment before he can see it (so, in a way, buying a so-called "pig in a poke"). The acceptance of the apartment is the moment when the consumer first sees the finished premises and in the presence of the developer may assess whether it is in line with what the parties agreed in the developer agreement. Pursuant to the Development Act, the acceptance is preceded by the final transfer of ownership of the apartment. In the event of acceptance of the house, the transfer of ownership of the house together with the plot below it is possible only after technical acceptance.

We know that buying the flat or a house constitute one of the most important transactions in our lives and we want the received property to be in perfect condition. Unfortunately, hardly any acceptance goes smoothly. 

If you want to be sure your property is in the proper condition order our audit service. Our civil engineers conduct technical audits in the following cities: Warsaw, Katowice, Tri-city, Poznań, Bydgoszcz, Toruń, Lublin, Kraków, Wrocław, Łódź, Rzeszów and Szczecin. 

Our representative will contact you to arrange a convenient date and time of your acceptance. We recommend to attach and send us a floor plan of an apartment and its finishing standards. During the acceptance, our technician will report to the developer any comments regarding the condition of the apartment and any defects (scratches, irregularity of plasters and walls or leaky windows or installations) on your behalf. Our technician is always obliged to perform the acceptance of the premises according to precise instructions and check every aspect in our "checklist" in the apartment. You will also receive your own report which will include any defects and flaws reported by our technician.

Analysis of the land and mortgage registers

Land and mortgage registers are the basic source of information about the legal status of real estate- they provide the data about the mortgages incumbent on the apartment, as well as other rights and claims, contain a precise description of the premises and information about its use and indicate the type of rights that the owner of the apartment holds for the premises, building and land. 

We offer the advanced analysis of the land and mortgage registers using our complex software that was created based on reviewing several hundred geographically representative registers - despite the fact that the registers are made available by the Ministry of Justice, the information is entered into them by several hundred district courts, and the method of recording important data often varies depending on the particular judge.

We send a transparent and standardized report to you within 24 hours since placing the order. Our reports consist of three parts: a summary, land and mortgage registers in a nutshell and parts with explanations and recommendations. The first part indicates which information should be given special attention when reading the report. The second part contains a summary of all the registers reviewed. In the third part we explain the information from the second part and propose specific actions that we recommend to take. Additionally - using the statistics collected by us - show the comparison of the property to other premises in Poland.

Thanks to our report, for a small amount (a shred of the final sale price) you can avoid unpleasant surprises (e.g. claims on the ground, no right to a parking space), save the time necessary to make a decision about buying a property, and gain an argument in negotiations. Thanks to our software and the accumulated knowledge, we are able to identify all important information and provide you with the necessary information faster and more efficiently than a law firm.

Technical audit of the flat and the house on the secondary market  

When buying a flat or a house on the secondary market the property may have hidden defects, the renovation of which can be very expensive – such as the replacement of old windows, alignment of walls or renovation of electricity installations. We have to also consider the whole building – there may be the lack of thermal insulation or wooden ceilings, whose poor technical condition can even be the reason for excluding the building from use by technical supervision.

If you want to check the technical condition of the property, order Pewny Lokal services. We will contact you and arrange a visit by our technician at a time convenient for you and the owner of the property. Our representative will check the most important technical elements of the premises, its area, and any defects. 48 hours after your visit, you will receive a comprehensive report on the property survey of your property.

Our report consists of a summary and three parts: a description of the premises and the building in which it is located, the "installations" and "finishing" sections. In the descriptive part we provide the area of ​​the premises and its height, assess the condition of the building's facade, its insulation and construction and provide information on the condition of balconies, basements and other associated rooms. In the part concerning installations (electrical, plumbing, heating and other) we specify their type and condition, check the quality of the telecommunications signal. In the finishing section, we assess the quality and condition of plasters, floors and doors, check whether the walls are straight and smooth and evaluate the material of frames and window panes.

We believe that it is easy to find unpleasant surprises on the secondary market, and the cost of technical audit is relatively small compared to the possible costs of unforeseen renovation. That is why we have devoted a lot of time to preparing a transparent report format that will allow you to quickly become familiar with the technical condition of the property and assess whether it is worth buying it and what price corresponds to its value.

In case of any questions please contact us via our email: kontakt@pewnylokal.pl or call our helpline: 797014014 (available every day from 8:00 AM till 07:00 PM).

 

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