Luxury Homes in Demand
April 19, 2016
The growing affluence of the Polish public is driving the demand for luxury real estate, including premium apartments that rival their counterparts in the world’s wealthiest cities in terms of luxury fittings and furnishings. Such apartments are available in Poland’s largest cities, though for now they represent a small segment of the real estate market in this country.
Halfway through 2015, luxury apartments accounted for 4 percent of the total supply of apartments on the new-home market in Poland, according to real estate services company redNet Property Group. Most of these apartments went on sale in Warsaw, but luxury dwellings were also available in Cracow, Wrocław, Poznań and the Tricity area of Gdańsk, Sopot and Gdynia.
New-premium-apartment sales total around zl.450 million in Poland a year. redNet’s Tomasz Kołodziejczyk says this market segment has high potential for growth. “It is expected to develop further owing to the growing incomes of affluent Poles,” Kołodziejczyk says. “Importantly, this group of buyers will become less keen to live in suburban mansions, opting for luxury apartments in city centers instead.” Major Polish cities such as Warsaw, Cracow, Wrocław, Poznań and the Tricity area are home to residential projects where a single dwelling costs more than zl.1 million.
While there is no single definition of a luxury apartment, it is widely accepted that it must have a number of special features. The most important are location, quality interior finishing and architecture. Deciding to buy a luxury apartment, customers first consider the surroundings—most often the city center, with the Old Town nearby, or an expensive, fashionable district. Original architecture is also important. It is an asset if a building was designed by a famous architect, follows the latest architectural trends and is made of top-quality materials.
Premium apartments are fitted with air-conditioning and cutting-edge technology, such as home and building management systems (HMS and BMS). Luxury apartment buildings offer facilities such as swimming pools, spa centers and gyms. The residents’ safety is ensured by round-the-clock security and monitoring. They are often offered concierge service and assistance in shopping, cleaning and other household tasks. Usually there is also a lobby with a reception desk and an underground garage for residents. Other selling points include quality exterior and common-area finishing. The largest dwellings usually come with terraces and yards.
All of that costs money. The most expensive luxury apartments in Warsaw cost zl.65,000 per square meter. In Cracow, the price is around zl.40,000 per square meter, and in Poznań and the Tricity area it is zl.30,000 per square meter, according to redNetPropertyGroup.
Warsaw, Cracow, Wrocław, Poznań and the Tricity area are the largest markets for luxury apartments in Poland, according to the Luxury Real Estate Market in Poland report released last year by consulting companies KPMG and REAS. While the number of premium dwellings under development has recently risen in Wrocław and Cracow, Warsaw is still far ahead of other cities, the report says.
According to a report on Warsaw’s luxury real estate market by real estate consulting company MadeConcept, a total of 313 luxury dwellings were sold in Warsaw on both the new-home and resale markets from January 2013 to June 2015. Of this, 237 apartments were sold in the downtown area, and Stary Mokotów was the second most popular neighborhood, at 46 apartments. The rest of Warsaw accounted for less than 10 percent of the market, with a total of 30 luxury apartments sold.
MadeConcept CEO Michał Borowski says Warsaw is increasingly seeing the same trends as most other large cities in Europe in terms of the prices and supply of luxury housing. According to Borowski, turnkey and tailor-made apartments will account for a growing segment of the Warsaw market in the future.