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Poland 'taking a breather'

Jaimie Kanwar

The days of stratospheric growth in Poland may be over, but one expert is still optimistic...

Polish property expert Stanislaw Staromlynski of iPropertyAssets recently commented: "We are not going to see the fantastic returns we have experienced in Poland for a while, I think. I'm referring here to returns of 30%, 50% and even 70% a year. The market needs to take a breather and we're not going to see strong growth again, I think, until around the second half of 2009.

"Even then we are not going to see the spectacular growth we have seen in the past; but on the plus side we are going to have a more mature and stable market, plus a more robust rental market.

"Supply is starting to fall and developers are consolidating, so there will come a point when lower supply coupled with greater affordability will drive up prices again - perhaps around 15% to 20% - which is still excellent growth, of course.

Growing rental market

He continued: "If you bought in '06 or earlier, the option is obviously there to take good profits now. If you bought in 2007, then the strategy must be to hold and in the meantime take advantage of the strengthening rental market."

But while Stanislaw believes the days of stratospheric price growth in Poland have probably passed, there will, he forecasts, still be some locations that will show very strong returns indeed, probably in the 20% to 30% range.

"One of my favorites is Plock - here you have the largest oil refinery in Poland, salaries are good and the city is developing at a very high speed, and yet property prices here are only around PLN3,500 a square meter.