2021 brought a surge of interest in Poland’s premium residential segment. The Tri-City is emerging as the second largest real estate market of this type after Warsaw, with sales last year reaching a record 900 units.
- In Poland's six main residential markets[1], upper-middle and high-end apartments[2] accounted for 6% of the available offer. In the Tri-City this share stood at 10.6%, the highest among the cities analysed.
- Sales of apartments increased significantly in 2021, reaching nearly 3,200 units, of which as many as 900 were on the Tri-City market.
- The main purchasers of premium properties continue to be a group of affluent Poles and foreigners with direct ties to Poland. People from Asia and the Middle East, who treat their purchase as a pure investment, still represent a small percentage.
- Buyers' motives include both the desire to improve their living conditions and to financially gain from short-term rentals. In recent years, there has been a marked increase in the demand for property partially driven by purchasers wanting to protect their savings from factors including rising inflation and uncertainty in the financial markets.
One in three developers’ apartments in Poland were on offer in the Tri-City
It is safe to say that every third apartment from the developer's offer, which was available on the largest national markets at the end of 2021, was located in the Tri-City. Tri-City was also the only market where the share of units in the apartment segment exceeded 10% of all units available for purchase,
comments Aleksandra Gawrońska, Head of Residential Research at JLL.
The continuing attractiveness of premium real estate as a form of capital security as well as the increasing specialisation of companies that supply this type of product to the market, means that more and more often decisions to purchase are made at the stage of investment implementation. This, in turn, provides greater liquidity and the possibility to prepare further investments well in advance, thereby complementing the offer on an ongoing basis,
says Michał Ciomek, Member of the Management Board, Invest Komfort.
Buyers are attracted by a view of the water
Over the last decade, apartments prices in the Tri-City have increased from PLN 10,000/sqm in 2011 to PLN 19,900/sqm at the end of 2021. Currently, the only city to have a higher square metre price is Warsaw. Since 2015, we have seen a surge of interest in the Tri-City market in buying properties in the higher quality segments – first for personal use, then for short-term rentals and, from 2019, primarily with a view to protecting one's savings. As a result, despite a significant increase in the supply of units from the apartment segment, we were still seeing demand outstripping supply,
comments Aleksandra Gawrońska, JLL expert, Head of Residential Market Research.
Location, location and one more time location
In the Tri-City, the land bank also consists of locations with hidden potential. The changes that we have been observing in the West for years are now slowly germinating in our country as well. We learn to read the city, predict the future of its urban development, stimulate and support positive change. In Gdynia and Gdańsk, only a dozen or so years ago, few people looked at the port areas as locations with potential for luxury real estate. Today, our city-forming investments, such as Brabank Apartments in Gdańsk, and Portova in the centre of Gdynia, does not surprise anyone and attracts a great deal of interest,
summarises Michał Ciomek, Member of the Management Board of Invest Komfort.
Everything indicates that the group of wealthy Poles who will be able to afford to buy an apartment in the future will grow, and the wealthiest will buy bigger and more luxurious units. Customers will increasingly expect standards that match those of Western Europe, both in terms of finishing, floor space and the additional services on offer. This will be of particular interest to the group of empty-nesters - people aged 50+ moving from single-family homes to flats for the next stage in their lives, and active retirement. With the limited availability of such units, this phenomenon will be important for the future value of units bought today, because an expensive flat as an asset will have more liquidity,
concludes Aleksandra Gawrońska.
[1] Kraków, Łódź, Poznań, Tri-City, Warsaw, Wrocław.
[2] In JLL analyses, units in multifamily residential buildings are usually divided in two basic segments: flats and apartments. Flats are further divided into low-end sub-segment units and lower-middle sub-segment units. In the apartment segment, there are two sub-segments: apartments (upper-middle) and luxury apartments (high-end).
