Poland
Poland shares borders with Belarus, Czech Republic, Germany, Lithuania, Russia (Kaliningrad Oblast), Slovakia and the Ukraine. Poland has pursued a policy of economic liberalisation throughout the 1990s and today stands out as a success story among transition economies. The privatisation of small and mediumsized state-owned companies and a liberal law on establishing private enterprise has encouraged the development of the private business sector. Poland has a population of 32m and joined the EU in May 2004.
Surging exports to the EU have contributed to Poland's strong growth.
Why Invest in Poland
The Attractions of Residential Property in Poland
- Residential house prices forecast to rise 15%-20% 2006 and 10% 15% in 2007.
- There is strong demand to replace Soviet built “panalaks” (blocks of flats) with new housing stock.
- Interest rates have fallen to c.4.5% compared with c.31.8% in 1995.
- Unemployment in Warsaw has dropped significantly: it currently stands at c.5% in contrast to c.11% in 1995.
- Average salaries in Wa r s aw have risen by c.161% since 1995 and are predicted by Knight Frank to rise another c.40.8% by 2009.
- According to Nykredit, the housing market in Wa r s aw has seen rapid expansion and shows little sign of a slow down in the near future.
- Comparatively low interest rates combined with increased avalability of mortgage finance Knight Frank believe an increasing percentage of people are now buying rather than renting residential property in Poland.
Growth Drivers in Poland
- Strong macro economic forecasts (see table).
- Poland joined the EU in May 2004 which is giving further direction to structural reform; their economy continues to growth strongly with GDP per Capita predicted to rise 54.76% by 2010.
- The increase in demand is driven mainly by the increase in buying power among home buyers. There is an improvement in mortgage offers and greater flexibility from banks.
- Due to its strong economy, skilled workforce and centrally located position, Poland has attracted strong foreign investment from companies like, Gillette, General Motors and Hewlett Packard.
Key risks of investing in Poland
- Still lower than EU average owner occupancy rates (55%).
- Inefficiencies in planning system.
- Higher than EU average VAT (22%) and transfer tax.
- Strong demand squeezing discounts achievable.
| Poland | EU 15 Average | |
| Forecast Changein Interest rates (2006 - 2010) | - 1.00% | 0.72% |
| Forecast Employment Growth (2006 - 2010) | 4.41% | 4.03% |
| Forecast Earnings Growth (2006 - 2010) | 40.8% | 18.35% |
| Forecast Inflation (2006 – 2010 av. % pa.) | 2.18% | 2.04% |
| GDP/Capita (change 2006 - 2010) | 54.76% | 35% |
Summary of why to invest in Poland
- Supply/Demand factors remain favourable in Poland.
- Favourable macro economic forecasts.
- Improvements in mortgages offer greater flexibility from banks.
- Significant levels of foreign direct investment.
- International companies relocating.
- Higher than average taxation.
- Discounts being squeezed dueto higher than average demand.
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