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Apartment for a Foreigner in Wrocław. Purchase or Lease?

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Foreigners are starting to have more influence on Wroclaw`s housing market. For now they mostly lease their flats but the number of those willing to stay here and buy their own one is rising.

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Wroclaw, as well as the whole Lower Silesia, is facing a rapid growth of legally employed foreigners. The data provided by Social Insurance Institution (ZUS) show that the number of foreigners working in our region has risen from a little more than 23,000 in the last year to almost 35,000 now.

Ukrainians are the largest group of foreign citizens working or running their businesses in Lower Silesian Voivodeship. There is also a significant amount of Belarussians, Romanians, Germans and Vietnamese.

“We often come across young foreigners who start their studies here or work and study at the same time”, states Roman Śniedziewski, the Director of ZUS Branch Office in Wroclaw.

As we learn from the data of Central Statistical Office (GUS) real property developers are keeping up to speed with their works while the market boom continues. The number of newly started housing construction works in Poland rose in May by 56.2% year-on-year. The demand is being ever more stimulated by foreigners among whom the most willing buyers are Ukrainians, Germans and Brits who in 2016 bought 6,400 apartments in the largest Polish cities including Wroclaw.

Apartment for Foreigner

More Foreign Clients

Zina Koreniuk comes from Ukrainian city of Lutsk. She had come here to study and decided to stay afterwards. She has been living now in Wroclaw for 8 years. Currently she works at one of the large international corporations operating in the capital of Lower Silesia. At first Zina had lived at a dormitory and later on she leased an apartment.

“Right now I lease a small but very nice two-rooms flat and I can`t stop imagining how I will arrange my own one in the future. I am definitely planning to get my own flat”, she says.

Zina is not thinking about a purchase from an investment point of view.

“Unfortunately it is not always possible to sell a flat with profit. If I left my favourite Wroclaw, I`d rather want to lease my flat out to someone. However I certainly do not see it as a main source of my income”, she adds.

Real property market experts admit that foreigners have an increasing impact on primary and secondary housing market in Wroclaw.

“Surely in the last one or two years we had a great influx of Ukrainian citizens to Wroclaw. We may identify two models in this respect: either a very cheap lease by unskilled workers often in larger groups or a purchase in order to obtain an address or to secure the capital. To a much smaller extent we also notice some activity by clients coming to Wroclaw from Asia, e.g. India mostly for jobs in IT”, as explains Monika Janusz, Secondary Market Sales Director at Jot-Be Nieruchomości.

As pointed out by experts, we also traditionally have a fairly large amount of Germans often being students seeking for nice and comfortable flats for lease or Koreans gathered around business areas in Kobierzyce interested mostly in lease in Krzyki.

Tomasz Gutowski, Regional Sales Director at Home Broker notices that there is a visible increase in the number of requests and purchases made by foreigners.

“Each month we are presenting real properties to several clients and each month we sell to foreigners. At the moment mostly to Ukrainians”, says Gutowski.

Home Broker has even prepared a marketing campaign directed to Russians and Ukrainians encouraging them in their native languages to contact the agency in respect of purchasing or leasing an apartment.

“When it comes to corporations` employees we encounter usually those from HP or IBM. They are of various nationalities but mostly Spanish and Italian”, Tomasz Gutowski adds.

In most instances they go for a long term lease also because of the fact the creditworthiness of a newly hired person is significantly limited.

Most Foreigners in Wroclaw Prefer to Lease

As admitted by Edward Laufer, President of Vantage Development so far the demand for new apartments among foreigners remains to be low.

“For now it is hard to quote any reliable statistics. Indeed the number of foreigners, mostly Ukrainians, in Wroclaw is increasing but for the time being they decide usually to lease and not to buy”, Laufer explains.

On the other hand the representatives of Blockpol-Developer notice an increased demand.

“Actually, we are observing more foreigners among our clients. We currently provide services for clients in English via phone, e-mail and also in person. Our website will be translated into English and Russian”, explains Weronika Chylarecka, Marketing Specialist at Blockpol-Developer.

Some of their clients are Poles who have been working in the USA for many years and now are coming back home and some are also Poland`s eastern neighbours.

Bartosz Głowacki, Lease Manager at Home Broker analyses that most (in fact over 90%) of the requests by foreign clients concern long term lease.

“The country of origin and held position is the determining factor when it comes to the decision whether to buy or lease an apartment”, Głowacki explains.

Blue collar workers from Ukraine who speak neither Polish nor English tend to choose lease of separate rooms or even single beds. Whereas those who speak Polish or English more frequently ask about flats in some distance to the city centre.

“IT specialists and managers mean top locations and larger budgets. However IT staff from India or Pakistan are looking for rather cheap opportunities”, says Głowacki.

Marta Mikulska, Marketing Manager at Jot-Be Nieruchomości expresses a similar opinion. She explains that regular low-level employees do not buy apartments because, in order to afford one, they would need to take out a mortgage loan.

“Even though they might have the required creditworthiness they are hesitant to long-term liabilities assumed after all in a foreign country; and the banks carefully analyse the risk of such applications but obviously there are no formal obstacles”, Mikulska states.

On the other hand top level specialists coming for fixed term contracts – as the expert arguments – often have apartments provided by their corporations as an additional benefit.

“In general it needs to be said that most purchases by foreigners are usually made by Ukrainians which is motivated primarily by the political crisis in their country”, Marta Mikulska states.

Apartment for Foreinger in Wrocław. Lease or Purchase?

Edward Laufer from Vantage Development explains that the decision of a foreigner whether to buy or lease an apartment depends on the term of the planned stay in Poland.

“If we are talking about a year or two, then it is obviously cheaper to lease. But if we consider four, five years or even longer, then naturally it is better to buy a flat especially having in mind that the conditions of taking out a loan remain to be quite attractive nowadays”, Laufer underlines.

On the other hand Weronika Chylarecka points out that if a foreigner has savings or required creditworthiness, then it is best to buy a flat.

“In the future you can always lease it out remotely or hire a professional agency to take care of that. The current rate of return fluctuates between five to six percent annually and may even be increased up to eight percent if the flat is leased continuously and the client is paying”, Chylarecka describes.

The representative of Blockpol-Developer mentions that the young families planning to move in to Wroclaw for a long term are most willing to buy an apartment.

“In most instances they already have jobs that enable them to use a loan for the financing of at least part of their investment”, Chylarecka adds.

Whereas Marta Mikulska from Jot-Be Nieruchomości advises foreigners to lease.

“A purchase always generates certain costs: renovation, finishing, fit out or a number of other fees related to formal and legal issues. Considering a huge amount of lease offers, which is steadily increasing due to housing investment boom, everyone should be able to find an offer ideally fitting their needs. You just need to be patient”, explains Mikulska.

Market experts are sure that in the nearest years Wroclaw will continue to be even more cosmopolitan city attracting more foreigners. It is beyond doubt that they will even more willingly buy their own apartments in the capital of Lower Silesia and their share in the general real property demand will rise.

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