Foreign funds invest in flats in Poland

Ten post dostępny jest także w języku: polski

Although developers are building more and more residential units, over 73% of Poles declare that they do not intend to buy a flat in the coming year. The new buyers, therefore, are foreign funds that invest in buying flats for rent, such as the Danish Nordic Real Estate Partners, which recently acquired over a thousand flats in Warsaw.

According to a Think Forward Initiative poll, as many as 73.6% of Poles surveyed do not plan to invest in buying a flat in 2022. Such a result may come as a surprise, especially since the demand on the housing market increased during the pandemic, and in 2020 it was Poland that saw the highest number of flats and houses completed per thousand inhabitants. According to the Central Statistical Office (GUS), over 40% more building permits were issued in the first half of 2021 than in the same period last year. However, the constantly rising prices of flats, connected with the increasing prices of construction materials, as well as the possible increase in interest rates announced for the end of this year, caused by the high, as much as 5%, inflation noted in July this year, may explain the declining interest in purchasing real estate by individual clients.

Wholesale purchase of flats by foreign investors as a new trend on the Polish market?

A new trend on the Polish market seems to be the wholesale purchase of flats by foreign investors, in particular by foreign funds. The largest investments made by the so-called housing corporations can be observed in Warsaw, where the wholesale purchase was made by the already mentioned NREP fund (1,000 units) and by the Swedish Heimstaden Bostad, which decided to purchase three times as many flats and acquired as many as 3,000 residential units. Thanks to the guaranteed sale of so many flats, developers can plan new construction for foreign clients.

NREP fund announced that by the end of 2021 it will invest as much as EUR 500m in Poland, planning to allocate part of this amount to the purchase of warehouses. The fund intends to further invest capital in the Polish real estate market, e.g. by purchasing as many as 10,000 residential units by 2025.

Although such large investments by foreign funds in the Polish residential market are not common, there is a concern that if this phenomenon grows rapidly, foreign funds will be able to determine rental prices in Poland. This is the case in Germany, where funds with ownership rights and with no competition artificially raise prices.

Investments by housing corporations may also deter individual customers. If a fund owns more than half of the residential units in a property, it is not possible to create a well-functioning housing community.