WHERE WEALTHY POLES BUY PROPERTY ABROAD

June 26, 2021

A growing percentage of affluent Poles are choosing to purchase real estate abroad. This trend is gaining momentum year after year. Why do the wealthy decide to purchase properties and apartments abroad? Does it make sense, and can they be profitable? Which countries lead the way in terms of premium real estate purchased by Poles?

Poles are getting richer faster and faster

Statistics show that the growth rate of the affluent population is increasing each year. This includes citizens whose monthly gross income exceeds 20,000 złoty for the wealthy, and 50,000 złoty for the ultra-wealthy. Interestingly, young people are increasingly joining the ranks of the wealthy.

According to the KPMG report for 2018 regarding luxury goods, within a year (between 2017 and 2018) the number of wealthy Poles increased from 23,000 to 1.3 million!

Where in Poland is the highest percentage of wealthy people found? The top three are:

Mazovia,
Silesia,
Lower Silesia.

Lesser Poland comes in fourth place. Why do the most affluent people live there? Because these regions are developing most dynamically compared to the rest of the country.

What is luxury for a rich man?

Wealthy individuals have diverse approaches to luxury goods. For some, luxury means purchasing an expensive, limited-edition watch, handbag, or jewelry, or perhaps a car, which is "out of reach" for the average person. Real estate is a larger expense, so until recently, it wasn't as common as purchasing a modern car or yacht. However, times are changing, and with it, the mindset of the wealthy is changing as well.

Poles are increasingly deciding to purchase luxury properties from the so-called premium class.

So far, the most popular targets have been properties and apartments in Poland, mainly in:

Warsaw,
Krakow,
Lodz,
Wrocław,
Poznań,
Gdańsk.

According to KPMG data, only 2% of Polish citizens own real estate abroad. So where do wealthy Poles choose to purchase real estate abroad, and why do they do so?

The most frequently chosen foreign properties from the premium market

The reasons for purchasing foreign real estate by wealthy people can be divided into two variants:

for recreational purposes,
for commercial purposes.

The first purpose – recreational – involves purchasing a property such as a seasonal home, where the owner relaxes during the summer or on weekends. In this regard, locations within a few hours' flight from home are most often chosen. These are destinations close to the equator, warm, and attractive for tourists. They can be considered an investment for the future – a place to relax in one's "old age.".

For this purpose, wealthy Poles most often choose:

Spain,
Malta,
Cyprus,
Italy,
Portugal,
Greece,
Bulgaria.

When they are not using the property, they rent it out for profit, offering accommodation for holidays or vacations, or on a long-term basis – this is called house sharing.

Of the above, Spain is the top choice. For those seeking peace, quiet, and contact with nature, choose:

Switzerland,
Austria,
Estonia,
Iceland.

In turn, the goal of earning money treats real estate purchases as an investment. Wealthy Poles seek locations in the centers of popular European cities like Paris, Berlin, or London. The main goal of owning premium properties in these locations is to rent them out to business travelers who need to temporarily relocate closer to their workplace, value comfort and luxury, and are not comfortable staying in hotels.

What should you remember before buying a property abroad?

Before buying a property abroad, thoroughly research the market in that country. This will allow you to assess whether your planned investment is overvalued, the current state of the real estate market—whether apartment prices will plummet in the near future, or the opposite. Verify the property's procedures and location—where it is located, what's nearby, and what the area's tourist and recreational potential is.

Purchasing real estate is a separate matter. Each country has different procedures for foreigners to acquire property or apartments.

For example, in Spain, you'll be required to have a current passport or ID card, a Spanish tax identification number (NIE), and proof of having opened a Spanish bank account. In Germany, on the other hand, you can purchase real estate without restrictions as a citizen of a country that has a reciprocal real estate agreement with Germany (applies to EU member states, Switzerland, and Turkey).

It's best to outsource formal and legal matters to a real estate agency, which will help you complete all formalities quickly and without misunderstandings (language barriers). Equally important, consider who will take care of the purchased property in your absence. This includes not only tidying up the place after the tenants leave, but also caring for plants and animals, as well as ongoing repairs and maintenance. In this case, it's worth considering hiring a local company to handle these tasks for you and ensure the property's appearance.

If you are interested in real estate in Poland or abroad, contact the premium real estate agency Vilea Property Boutique.

information: www.vilea.pl

contact: biuro@vilea.pl

selected offers in Poland – click here

WHERE WEALTHY POLES BUY PROPERTY ABROAD

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