How many Foreigners buy Apartments in Poland?

I’ve recently come across a most intriguing report (31 May, 2023) compiled by PKO Bank Polski which delved into the topic of how many foreigners buy apartments in Poland. In a nutshell, foreigners are becoming more and more active on the Polish real estate market. Even though 2022 witnessed a generally strong decline in sales on the Polish housing market, a strong increase in the share of apartment purchases by foreigners was recorded.

Let me present some of the main findings of the PKO Bank Polski report which primarily considers foreigners’ interest in the Polish housing market in 2022.

How many Foreigners buy Apartments in Poland? – The Main Takeaways from the PKO Bank Polski Report

Having studied the PKO Bank Polish report titled “Foreigners are becoming more and more active on the Polish housing market”, here are the main findings shared by the bank’s Department of Economic Analysis :

1. First and foremost, foreigners significantly increased their purchases of apartments in Poland during 2022. This fact certainly coincides with a decline in the number of apartments bought by Polish nationals.

2. PKO Bank Polski estimated the foreigners were the buying party in up to every seventh residential real estate transaction in 2022 with foreigners buying over 29,000 premises in Poland compared to 22,000 in 2021.

Here’s a graphic which outlines the share of apartment purchases by foreigners between 2017 and 2022:

3. The biggest contributors to the steep rise in the number of apartments bought in Poland by foreigners in 2022 compared to 2021 were Ukrainians and Germans. These two nationalities have been by far the most active buyers for years. Swedes, Luxembourgers, Cypriots, Belgians, the Dutch and Austrians also rank highly.

4. Unsurprisingly, Warsaw is the most popular city among foreign investors. Kraków occupies second place, with Wrocław a close third. In fact, in terms of the number of apartments purchased by foreigners per every 1,000 apartments, Wrocław ranks second.

The Two Main Reasons for the Steep Rise in the Number of Foreigners Purchasing Apartments in Poland

Now that I’ve shared some of the main findings in the PKO Bank Polski report into how many foreigners buy apartments in Poland, here are the two main reasons for the significant rise in the number of foreigners buying apartments in Poland:

1. Economic immigration of Ukrainian and Belarusian migrants and the impact of the war in Ukraine

Considering that Ukrainians lead the way in terms of apartment purchases in Poland by a significant margin, the war in Ukraine has undoubtedly had an impact on the overall number of foreigners buying apartments in Poland.

The PKO Bank Polski report states that the growing demand for apartments is related to the “plans of economic migrants”, mainly from Ukraine and Belarus. Therefore, even before the war in Ukraine broke out, immigrants from these countries were moving to Poland with the intention of staying in the country long-term. The increase in Ukrainians’ interest in apartments in Poland dates back to 2014. It was in March 2014 that Russia annexed the Crimean Peninsula, while the war in Donbas broke out a month later.

As for the share of Ukrainians and Belarusians in the volume of transactions, – their share increased to 29% in 2022 from 17% in 2016.

2. High rental yields and significant resale values of properties in Poland

The report by PKO Bank Polski estimates that many purchases of apartments by foreigners in 2022 were of an investment nature.

PKO Bank Polski picked up on the increase in the number of purchases of apartments by Swedes, Luxembourgers, Cypriots, Belgians and Austrians in 2022. Their activity on the Polish transaction market in the years prior to 2022 had been rather moderate. It was among citizens of Sweden, Luxembourg and Cyprus that the increase in purchases compared to the previous year was the highest. These citizens are representatives of wealthy countries. Therefore, one has to assume their acquisitions were of a purely investment nature.

Buy-to-let in Poland is attractive to foreign investors due to the high gross rental profitability and relatively low taxation of rental income. Moreover, the solid macroeconomic foundations of the Polish economy, especially the labour market, allow for a strong increase in housing prices in the long term. Therefore, foreign investors are fully aware of the possibility of reselling Polish real estate for a substantial profit at a later date.

It may be assumed that foreign investors took advantage of greater negotiation opportunities in 2022 which arose from weakening economic conditions on the housing market and the significant depreciation of the Polish zloty.

Summing up

If you’re interested in the question – how many foreigners buy apartments in Poland? – it is well worth checking out the PKO Bank Polski report (link below) which reveals the extent to which foreigners were active on the Polish housing market in 2022.

It’ll be certainly interesting to see whether foreigners turn out to be the buying party in up to every seventh residential real estate transaction in 2023 just as they were in 2022.