Strong economic growth has driven Poland's real estate market to spectacular annual gains of as much as 30 per cent in the past few years. Analysts expect the market to recover and offer good investment opportunities despite recent reversals.
The Polish economy has been transformed since the fall of the Berlin Wall and, in recent years, has experienced strong growth, becoming one of the most successful of the former communist countries of Eastern Europe.
Gross domestic product growth in recent years has been strong at about 6 per cent a year and, although still high, unemployment has fallen significantly and real earnings have grown rapidly.
According to Warsaw property investment consultant REAS, strong demand for residential property has been driven by economic growth and demographics as young people born during a surge in the birth rate in the 1970s and 1980s now seek their own homes. This is especially true in the capital, which has been the focus of economic growth, with unemployment rates at about 2 per cent last year, much lower than the national average, despite the city attracting many newcomers from other parts of Poland.
Michael Clay, senior partner of real estate investment company Davidoff Kleeberg & Maresch, which is active in Warsaw, said that growth in the residential sector had benefited greatly from Poland joining the European Union in 2004, which had helped stimulate domestic demand for housing and the entry of foreign investors.
As a result, the residential market in Warsaw in recent years has been highly dynamic, especially in the boom years from 2005 to 2007.
