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The Warsaw Voice » Real Estate » October 29, 2008
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Growing Taste for Luxury Apartments
October 29, 2008   
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Robert Chojnacki, CEO of redNet Property Group:

Demand for luxury apartments in Warsaw is likely to continue to grow in coming years. This will be the result of several factors, which include the general situation on the real estate market, developers' sales policies, the rate of growth of the luxury-housing market and the housing preferences of wealthy Warsaw residents.

However, this will happen on condition that these will indeed be luxury apartments with a capital A, with a minimum of 100 sq m of floor area, well laid out, in not very high buildings of a few floors at most, with porterage and services on the ground floor. The buildings need to be in exceptional locations, for example near a park or the Old Town, and offer penthouses on the top floors. In a situation of over-supply on the market, prime housing projects put on ice and increasing difficulties for people in obtaining mortgages, the natural segment for developers seems to be, besides popular housing, the luxury apartment-building segment.

The luxury apartment market in Warsaw is relatively young. The first projects of this type did not appear until the end of the 1990s. Demand for luxury homes in the capital is still far from being satisfied, and potential clients have at their disposal significant financial resources or are able to obtain suitable credit facilities from banks. Owning a luxury apartment has for some become a symbol of status and success.

Old Warsaw districts, and only those on the west bank, enjoy the most interest from would-be buyers. Besides Śródmieście, Mokotów is emerging as first choice for buyers, followed by Żoliborz and Ochota. The average price of one square meter of an apartment here is several times higher than that of a home in the popular housing segment. The highest prices can be as much as zl.50,000 per sq m.

The future for the prime housing segment in the zl.11,000-15,000 per sq m price range is not so rosy. It is thought that developers to a large degree are deciding against such projects and are instead building popular housing in districts far from the city center or exclusive apartment buildings.
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