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Posted on 05 November 2007
Investment Property in Wroclaw in Poland
There is a shortfall of 42,000 houses in Wroclaw – and Knight Frank’s have calculated it will take 16 years to meet this current demand at the current building rate of just 2600 units per year - and this demand is increasing every day due to the maturation of the baby boom generation in the 70-80’s who are all reaching the age to leave home!
Capital growth is over 20% per annum due to this massive undersupply and the introduction of some very attractive mortgage terms.
We have managed to negotiate the first interest only mortgages for foreigners due to the volume of business we have generated which can make a massive difference to cashflow.
With only 10% deposits – this is the chance to gain a huge return on investment in an emerging market.
Why Invest in Poland?
Poland is a leader on the continent in terms of economic transformation. Since joining the European Union in 2004 the country continues to implement bold political and economic changes. The effective absorption of EU funds has meant improved infrastructure which is key for the successful implementation of large scale investments. It is simply the youth, determination and excellent qualifications of the workforce that continue to lure FDI into Poland.
Investment potential statistics:
- Ranked number 1 in Europe in terms of planned investments*
- Ranked number 4 in the world for R&D investments*
- Ranked number 5 in the world in terms of best locations for FDI** Values calculated on a 0-3 scale
- GDP growth (5% in 2006) two times faster than western Europe.
Human Capital
- 50% of Poles are under the age of 34
- 35% of Poles are under the age of 25
- 427 higher education institutions train more than
- 2 million university-level students.
- Poland’s population: 38 million
- Retail market boasts 10% annual growth rate
- 250 million consumers within 1,000 km span
- Poland bridges key markets to the east and west
Why Invest in Wroclaw?
Wroclaw is a dynamic cosmopolitan centre at the forefront of change in the “new” Europe. As the capital of the province of Lower Silesia and Poland’s fourth largest city, Wroclaw is a strong economic, scientific and cultural centre. Wroclaw is currently one of the fastest developing residential markets in Poland.
The residential stock in Wroclaw systematically improves. However, there is still a large gap between the number of households and number of existing residential units.
According to calculations made by Knight Frank based on data obtained from the Central Statistical Office, there is a shortfall of approximately 42,000 units in Wroclaw. It would take over 16 years to satisfy the demand created by the households if the sector developed at the pace of some 2,600 units annually.
A key factor that makes Wroclaw a fantastic place to do business is the location. It is situated strategically between Prague, Warsaw and Berlin, and Wroclaw boasts a developed transportation infrastructure that connects the metropolis with the whole of the continent and beyond.
The highly regarded universities and research centers in Wroclaw embrace new ideas and innovation.
At present, information technology, financial services and auto-motive production are the key industries driving the economy. However, recent homegrown and international hi-tech investments mean that the agglomeration’s competitiveness will be increasingly determined by knowledge and innovation.
The big industrial and commercial names are already starting to flock to Wroclaw with many major shopping malls in Wroclaw containing Tesco, Ikea, Obi and many more household names.
So a booming economy – with GDP growth at over 5% per annum, and prominent in many sectors – so not reliant on any one – a huge force in the automotive, financial, electronics and IT industries.
Demand for residential units on all selected regional residential markets has been affected by the growing availability of mortgage financing. This is characterized by decreasing mortgage interest rates. Moreover, the number of young people born in the “baby boom” of 70’s and 80’s
who are perceived as the potential first buyers, account for over 26% of the Wroclaw population.
Additionally, Wroclaw and surrounding areas have recently welcomed several foreign investors who plan to create around 100,000 employment opportunities in the next four to five years.
Return on Investment
The most powerful part of investing here is the 90% loan to value borrowing, and the huge capital growth Wroclaw is experiencing, alongside the excellent value this deal offers.
Based on just 10% deposit, and say 20% capital growth – you can see up to 200% return on investment per annum!
This is all about maximising your returns by using other people’s money effectively and cheaply.
There is no doubt how well the economy is doing – by the sheer number of Multinational companies there and the young, ambitious work force. There is also no doubt there is a massive shortage of housing in Wroclaw.
If you have any questions on investing in Wroclaw, or Poland in general, email me at alan@property-investment-deals.com and myself or one of my team will be happy to help.
Alan
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About Alan:
Alan Forsyth is a full time property investor from the UK. He runs the website www.property-investment-tips.com which gives free, independent investing tips to investors. This site, www.property-investment-deals.com is designed to run alongside his original website, and will give in more detail his recommended property deals, and full details/pictures of any new deal on offer.