Buying Property in Poland
The Definitive Guide to
Buying Polish Property

Buying Off-Plan

This is a preview to the chapter Buying Off-Plan from the book Buying Property in Poland by Tim Hill.
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Introduction


One of the most popular options pursued by foreign buyers has been off-plan purchases. This is not only because of the long completion dates available but because comprehensive documentation is usually provided on the standard of build which gives some level of comfort and confidence and makes the legalities more straightforward.

Moreover new developments attract wealthier Poles (as both residents and tenants) because modern buildings are simply more aesthetically pleasing. In many cases they are not the best financial investments for either yield or capital gain1 but they have appeal because, for foreign buyers, they are easier to understand and compare with Western markets.

Types of Developments


The Polish are savvy and prudent buyers not prepared to pay unreasonable premiums on new houses or apartments without good reason. Foreign buyers on the other hand are less price sensitive to properties which "look cheap".

For developers then it is generally a decision with each new project to price up and market to foreigners or price to the market and sell domestically. Because foreign buyers can be more complicated, require extra administration and staff time it is difficult to do both.

This does not mean that you will not make money when purchasing the former, it is hard not to do so in a country with the expected growth that Poland has, but your overall capital gain will be diminished in return for an easier life.

Tell tale signs that you are looking at a development for foreigners include glossy brochures in English, well versed English speaking sales staff and impressive websites, once again in English.

The downsides to these projects are two fold. Firstly most of the units will be destined for the rental market, which may make finding tenants on completion a timely affair as they are spoilt for choice. Leading on from this blocks that are predominantly tenanted can be less well cared for and communal areas can decline in their appearance more rapidly than buildings with a higher owner occupier ratio.

Secondly, if too many buyers try to turn their contracts (sell their units on again before the completion date) the market price of your property may dip to less than the original purchase price for a period of time and you will be locked in by negative equity.

To avoid the above requires more investment in time at the beginning. Hiring translators or consultants that can help you buy into a 'real development' could be money well spent. Builders focusing on the domestic market often refuse to deal with non-Polish speakers directly and even require some arm twisting in order to accept your reservation through a third party.

This more difficult option is the environment in which trail blazers who make and made big money operate, and so levering your way in with a reluctant seller can be well worth the time and effort.

It must be pointed out that this overall situation is constantly evolving. There is a growing middle ground. These are developers who are aiming their offers at the domestic market. However by chance they have sales staff with sufficient English to talk to foreign buyers and, so long as you are prepared to find a solicitor who will take care of the extra paperwork, they will sell to you.

This final type will allow you to buy but expect all or most of the literature and paperwork to be in Polish and for the sales staff to be a little reluctant in assisting you. Often, for example, they will simply ask you to make your enquiries via your solicitor. Despite some grasp of the English language you should not expect them to be able to explain technical details about the construction or finish and perhaps not even be able to clearly describe the payment options (see below).

Estimated Service Charges


It is important to realise that developments with swimming pools, porterage, gyms and 24-hour security are fairly new to the country and very new to some cities. Therefore developers are not always very good at estimating how much they will affect the service charge that will need to be applied to each block and therefore they, through no malice or dishonesty, can get it wrong.

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What else is in the chapter 'Buying Off-Plan'?

Reserving a Property

Ways to reserve an off-plan unit in Poland vary wildly and much of what would set off alarm bells in other countries is widely accepted. Most notably it is possible ...

Exchanging Contracts

Exchange of contracts is simply a meeting with the buyer, a representative of the developer and a solicitor to witness the signing. The contract should include: ...

Payment Options

On the developers' side cash flow issues and difficulties obtaining reasonable credit has caused a tradition of staged payments to evolve. Sometimes these are simple, perhaps 10% each month between ...

Completion

On completion developers offer you a chance to inspect the property for snags and you can either do this yourself or hire a company such as Mamdom to do it ...

Fitting Out Shells

In the 1960s and 1970s Polish developers delivered apartments to a finished standard. Buyers however, disappointed with the poor levels of finish, began to demand that the builders just gave ...

Furniture, Fixtures and Fittings

It doesn’t matter for what reason you are fitting out or furnishing your shell, materials and furniture to fit every budget are available in Poland from Italian lighting to Danish ...

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"A sympathetic introduction to Poland and the Polish property market, offering an accurate insight into what is for many British..."

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