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The systemic transformation and the resulting economic changes of the 1990s brought far-reaching consequences for many areas of social and economic life. Unlike most large cities, which coped fairly well with the new challenges, many small and medium-sized towns found themselves in a very difficult situation. Rising unemployment due to the collapse of unprofitable businesses, a lack of new investments, and, most significantly, a population outflow, particularly among young people, are the main negative consequences of these changes, which are still perceptible today across the entire regions. After joining the European Union, Poland became one of the largest beneficiaries of structural funds aimed at reducing regional disparities, and a significant number of small towns successfully seized EU funds not only to improve infrastructure and attract investments, but also to enhance the quality of life for residents. However, despite significant progress, the most serious issue for the vast majority of small and medium-sized towns remains depopulation, with all its negative consequences – social and economic challenges, and problems with the functioning of local institutions such as schools, hospitals or cultural centres. Young people, seeking better educational and career prospects, are migrating en masse to the largest cities, such as Warsaw, Cracow, Wroclaw or Gdansk, or they choose emigration and starting a new life abroad.

So, is there a chance to reverse this unfavourable trend? It seems there are at least a few significant arguments in this respect.

The outbreak of the COVID-19 pandemic served as a catalyst for changing how people think about their place of residence. One of the most important changes influencing housing decisions during the pandemic was the widespread adoption of remote work. The remote or hybrid work model was implemented by the vast majority of companies and institutions, allowing employees to perform their tasks without the need to commute to the office daily. This forced “experiment” demonstrated that such a work system allows companies to operate efficiently without compromising productivity while significantly improving employees’ quality of life and reducing operational costs. Although some companies returned to traditional office work after the pandemic, many have continued with remote or hybrid work, enabling employees to live in smaller towns without being tied to a workplace in a big city. This is a significant qualitative change that is already having, and will continue to have, a lasting impact on the real estate market by increasing the attractiveness of small towns and suburban areas.

However, the impact of COVID-19 on the growing appeal of living in smaller towns extends beyond remote work. The pandemic has significantly accelerated the transition of commerce and services, including public services, to the Internet, as well as access to cultural goods. As a result, residents of small towns now have much easier access to products and services that were previously available almost exclusively in large cities. These changes have substantially reduced the advantages of living in large cities. Consequently, small towns and suburban areas have become increasingly attractive alternatives – places, where one can live more peacefully, in greater comfort, while incurring significantly lower costs.

Infrastructure investments, particularly those that reduce the travel distance (measured by commuting time) between small towns and larger urban centres, have been and continue to be a critical factor in increasing the attractiveness of small towns as potential places of residence. Thanks to the construction of road infrastructure and the modernization of railway lines, the commuting time to Warsaw from small towns like Łowicz, Żyrardów, and Siedlce has reduced by as much as half, making home-office commutes (assuming a hybrid work model) much less burdensome than before. When using rail transport, commuting times are comparable to those from peripheral districts or towns just outside the city’s boundaries.

In the context of relocating to a smaller town, the most tangible “pro” argument remains property prices. Apartment prices in Poland’s largest cities have remained at levels that virtually exclude homeownership for a significant part of the population, especially young people. The AMRON Centre’s Housing Affordability Index for the eight largest cities shows a clear decline in housing affordability due to both rising prices and increased interest rates since 2021. While this decline also affects smaller towns, housing affordability in smaller centres, despite previous price increases, remains high. A comparison of housing affordability indices for Warsaw and five towns of varying sizes located within about an hour’s commute to Warsaw or less (i.e. Ciechanów, Siedlce, Skierniewice, Łowicz, and Warka) illustrates this difference well. In Warsaw, rising prices and credit costs have reduced housing affordability to levels last seen in 2011. In smaller towns, despite a noted decrease, housing affordability still exceeds the IDM for Warsaw noted during the last boom in 2021.

HOUSING AFFORDABILITY INDEX FOR WARSAW AND FIVE SMALL TOWNS IN Q1 2020 – Q2 2024

source: AMRON Centre

It’s easy to imagine the potential benefits of such a choice for both young and older individuals. For the latter, relocation allows for freeing up part of the capital tied up in their current property, which can be used for other purposes, such as investing in a second apartment to generate additional rental income or passing it on to the younger generation “for a start.” Lower living costs in smaller towns are also significant for retirees. For younger people, choosing a smaller town nearby the big city is an opportunity to purchase a larger apartment or take on a smaller mortgage.

Buying an apartment in a small town does not necessarily have to be for personal use. Apartments in small towns can also serve as a potential investment, not burdened with excessive risk and offering quite decent returns. An analysis of price dynamics in recent years shows that price increases in smaller towns have not significantly differed from those in the largest cities. This means that an apartment in one of the five analysed smaller towns over the last 10 years was as good investment, as the one in Warsaw.

PRICE DYNAMICS OF 1 SQM OF AN APARTMENT IN 2014 – 2023

source: AMRON Centre

Investing in an apartment in a smaller town is not just speculation. In recent years, the significant growth was observed on the rental market, including in smaller towns, and rent rates in such locations guarantee returns comparable to those in larger urban centres. Additionally, if the town, where you decide to invest, is located in mountainous area, seaside or simply culturally or naturally valuable areas, there is also potential demand for short-term rentals from tourists.

The growing importance of sustainable development is also not insignificant for the chances of revitalizing small and medium-sized towns. Sustainable development is an idea that aims to foster societal growth without compromising the prospects of future generations. In other words, it is a way of thinking about development that combines concern for ecology, social justice and economic efficiency while preventing the depletion of natural resources. These trends favour the development of smaller, more sustainable communities. “Work-life balance”, easier communication and environmental orientation are values increasingly important, especially for younger generations.

As you can see, there are plenty of reasons to consider when considering investing in or simply purchasing a  in smaller town for personal use. Certainly, small towns differ greatly from one another, offering potential investors varying levels of opportunities and risks. However, it seems that for many people, including young ones, such an investment or life choice regarding their place of residence may be entirely rational.

Jerzy Ptaszyński
Research and Market Service Director

Buying a real estate is considered one of the most beneficial and safest long-term investments. It not only effectively protects capital from losing value, as shown by the recent period of high inflation, but it can also generate regular income without the need for constant involvement in the work process. Unfortunately, renting doesn’t always go smoothly. One of the main challenges that property owners face is finding a reliable tenant. Rent arrears, damaged furnishings, or neighbours’ complaints about noisy all-night parties are just a few difficulties that landlords encounter. It’s therefore worth taking steps to minimize the risk of financial losses and avoid additional stress. So, how do you properly assess the reliability of a potential tenant?

First, have a conversation

Already during the property viewing, it’s worth having a casual conversation that allows you to get a first impression of the person. It’s clear that you can’t predict everything — certain things only come out over time. Nevertheless, you can ask about his or her job or hobbies, which will give you some insight into the person’s lifestyle and what kind of tenant he or she might be. If you don’t accept pets in the apartment, it’s good to communicate that clearly at this stage. During such a conversation, you can also learn about you potential tenant’s rental motivations, helping you better understand his or her intentions and facilitating a decision about long-term cooperation.

Before you sign the contract

It’s worth checking the financial standing of a potential tenant to minimize the risk of delays in your rent payments. Most available debtor registers on the market are primarily used to verify companies, contractors or financial institution clients, so private individuals usually don’t have direct access to them. However, there is the option to check someone in the National Register of Insolvent Debtors (KRDN), which is a public institution. Its purpose is to protect citizens from dishonest actions by people who do not fulfil their financial obligations.

If possible, it’s a good idea to ask for references from previous landlords. This should be done in a relaxed and polite manner so that the future tenant doesn’t feel suspected of anything. The goal is simply to obtain information about whether the rent was paid on time in the past.

Financial protection

Even the most thorough selection doesn’t guarantee that the tenant will pay rent on time and take care of your property, so it’s worth considering including financial protection in the contract.

A widely used and tested solution by property owners is to require a security deposit. A deposit is a sum of money, usually ranging from 1 to 3 months’ rent, which is fully refunded at the end of the lease if the tenant meets the contract’s conditions and returns the apartment in the same condition. Otherwise, the property owner has the right to withhold part or all of the deposit to cover unpaid bills or damages.

It’s worth considering the insurance of the apartment, which will not only cover financial losses in case of a problematic tenant, but will also protect you against unforeseen events such as flooding or fire. Insurance companies offer various packages, allowing you to choose the option that best suits your needs and protects the apartment from situations that cause the most concern.

A well-constructed rental agreement

The key to success in renting out property is a well-thought-out contract that fully protects your interests. To ensure that all important clauses are included, it’s worth seeking expert advice when drafting the document. Although the one-time cost of a lawyer’s consultation may seem like an expense, a well-constructed contract will serve you in the long term, forming the basis for each subsequent rental. It’s also worth considering an occasional rental agreement, which provides the owner with greater security than a traditional contract.

A well-written contract should include:

• the parties’ details,
• the address and description of the rented property,
• the duration and termination conditions of the contract,
• the amount of rent and payment deadline (it’s important to clearly specify, which party is responsible for additional payments such as utilities, Internet etc.),
• the amount of the deposit,
• the rights and obligations of both parties,
• consequences of payment delays,
• a sublease prohibition,
• a handover protocol with detailed photos of the property reflecting its condition when handed over to the tenant,
• agreed-upon penalties,
• signatures of both parties.

Quick response

When the first signs of payment delays appear, it’s crucial to act immediately. Of course, we’re not talking about a one-time incident — everyone sometimes forgets. However, the faster the response, the greater the chance of solving the problem early on. The tenant should be aware from the very beginning that delays in payments are quickly noticed. Consistently enforcing payments sends a clear signal that tardiness won’t be tolerated, reducing the risk of further problems.

Eviction as a last resort

If a tenant is late with rent payments and our reminders go unanswered, an official demand for payment should be sent, specifying a final deadline for settling the debt. If there’s no response, further legal steps may be necessary, which could ultimately lead to the tenant’s eviction. However, it’s in our interest to do everything possible to resolve the issue amicably, such as proposing a payment plan, as court proceedings are costly and lengthy. Eviction is a last resort that requires a court order, allowing the landlord to remove the unwanted tenant from the property. That’s why it’s important to have a well-prepared contract, which can facilitate and expedite the resolution of such matters.

Summary

Completely avoiding troublesome guests and related issues is not always possible, but we can significantly reduce the risk by taking appropriate actions before entering into a rental agreement. Checking the tenant, preparing a diligent contract, proper financial protection and responding quickly to payment delays are fundamental steps in protecting against dishonest tenants.

Joanna Woźniak
Specialist for Operation and Development of the AMRON

In recent years, more and more foreigners, especially from EU countries and Ukraine, have decided to buy flats in Poland, both for investment and residential purposes. Stable economic growth and low interest rates have sustained the growing demand for local housing until 2019. Flat prices were rising rapidly, especially in large cities such as Warsaw, Cracow, Wroclaw and Gdansk. The outbreak of the COVID-19 pandemic in 2020 temporarily froze the housing market. Many transactions were put on hold and developers delayed new projects. Despite the initial slowdown, housing prices did not fall. Demand recovered quickly, driven by low interest rates and growing trend of investing in real estate as a safe investment in uncertain times. The gradual increase in interest rates reduced the creditworthiness of Poles, which resulted in a decline in the number of loans granted in 2022. Developers continued to keep prices high, mainly due to rising construction costs. In 2023, the “Safe Loan 2%” support programme was launched, which boosted demand in the segment of flats purchased by young people, as well as the number of granted loans. According to the data presented in the AMRON-SARFiN Report, 162 375 loans were granted in 2023, which was higher by 28.55% compared to 2022 and 36.69% lower compared to the record year 2021 in terms of the number of new loans. The value of newly granted mortgage loans in the indicated period amounted to PLN 62.763 billion, which was 43.81% more compared to the previous year and 26.82% less compared to 2021.

CHART 1. NUMBER AND VALUE OF NEW HOUSING LOANS GRANTED FROM 2013 TO 2023

source: self-study based on the SARFiN System data

According to data from the Statistics Poland (GUS) on the yearly sales and value of residential properties, the Polish housing market experienced significant shifts between 2013 and 2022. The volume of sold apartments grew steadily until 2019, but the onset of the pandemic led to a drop in sales in 2020. Despite this decline, the total value of transactions kept rising, peaking in 2022, which was mainly the result of increasing housing prices.

CHART 2. NUMBER AND VALUE OF DWELLINGS SOLD IN TOTAL MARKET TRANSACTIONS FROM 2013 to 2022

source: self-study based on data of Central Statistical Office

As stated in the Ministry of the Interior and Administration (MSWiA) Report on execution of the act on real estate acquisition by foreigners, in 2023 foreigners purchased over 14 346 residential premises with a total area of ​​​​nearly 834 619 sqm. This is close to the figures for 2022, when foreigners purchased 14 359 residential units covering 820 105 sqm, accounting for 6.37% of the total area of sold flats. In comparison, in 2021, the Ministry recorded 10 621 dwellings purchased by foreigners, with a total area of 629 238 sqm. This means that in 2023, the number of apartments bought by foreigners was 35.07% higher than in 2021. The proportion of residential units acquired by foreigners compared to the overall sales was 3.73% in 2020, 4.34% in 2021 and 6.37% in 2022, marking the highest percentage in the last decade.

CHART 3. NUMBER OF E
NTRIES TO REGISTERS REGARDING DWELLINGS PURCHASED BY FOREIGNERS ON THE BASIS OF PERMITS AND WITHOUT OBLIGATION TO OBTAIN THE PERMISSION AND THE TOTAL AREA OF PURCHASED DWELLINGS FROM 2013 TO 2 023

source: self-study based on the report of Ministry of the Interior and Administration (MSWiA) on execution of the act on real estate acquisition by foreigners in 2013– 2023

TABLE 1. PERCENTAGE OF DWELLINGS ACQUIRED BY FOREIGNERS ON THE BASIS OF PERMITS AND WITHOUT OBLIGATION TO OBTAIN THE PERMISSION IN TOTAL NUMBER OF DWELLINGS SOLD UNDER MARKET TRANSACTIONS IN 2013 – 2022

2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
2.37%	2.45%	2.50%	2.83%	2.68%	3.46%	4.07%	3.73%	4.34%	6.37%

source: self-study based on the report of Ministry of the Interior and Administration (MSWiA) on execution of the act on real estate acquisition by foreigners in 2013 – 2012 and data of Central Statistical Office

In recent years, Ukrainians, Belarusians and Germans have been the top foreign buyers of residential properties in Poland. Ukraine has emerged as the dominant player, with its market share increasing by over 37 percentage points over the last decade. In 2013, Ukrainian citizens held 9.09% of the market, but by 2023, they purchased nearly half of the total residential space bought by foreigners. This is largely driven by migration caused by the war in Ukraine. The share of apartments purchased by Belarusians also rose considerably, reaching 13.46% and placing them second in 2023. In contrast, Germans, who led as foreign buyers in 2013, saw their market share drop significantly to 8.91% in 2023, although they still ranked third. Over the years, a noticeable decline in property purchases has been seen among citizens of France, the Netherlands, the United Kingdom and Italy.

TABLE 2. TOTAL AREA OF DWELLINGS (IN SQM) PURCHASED BY FOREIGNERS ON THE BASIS OF PERMITS AND WITHOUT OBLIGATION TO OBTAIN THE PERMISSION (BY THE COUNTRY OF PURCHASER’S ORIGIN) – SELECTED COUNTRIES IN 2013 – 2023

country	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
Austria	1.85%	2.20%	2.61%	2.23%	2.73%	2.16%	1.42%	1.61%	1.61%	1.42%	0.85%
Belgium	1.38%	1.79%	1.40%	1.07%	1.02%	1.23%	1.01%	1.92%	1.62%	0.75%	0.81%
Belarus	3.43%	3.15%	3.84%	3.93%	4.42%	4.77%	5.25%	5.53%	6.10%	8.64%	13.40%
China	1.52%	2.26%	2.30%	2.03%	2.78%	2.20%	2.16%	2.40%	2.26%	1.61%	1.39%
Cyprus	2.87%	5.84%	3.76%	2.51%	1.50%	1.09%	4.85%	1.87%	0.61%	0.76%	0.63%
Czech Republic	0.76%	1.23%	1.05%	1.23%	0.71%	1.25%	0.62%	0.72%	0.98%	1.09%	0.85%
France	5.54%	7.13%	5.09%	4.74%	5.05%	3.96%	3.57%	3.37%	2.75%	2.36%	1.47%
Spain	2.70%	1.89%	1.19%	2.53%	2.00%	1.48%	1.79%	1.27%	1.19%	0.98%	1.14%
Holland	4.06%	2.86%	4.26%	1.49%	2.03%	1.62%	1.37%	1.70%	1.65%	1.48%	1.30%
India	0.39%	0.45%	0.65%	0.84%	0.79%	0.83%	0.74%	1.25%	1.25%	1.20%	1.25%
Ireland	2.48%	1.54%	1.06%	0.61%	0.61%	0.63%	1.00%	0.77%	0.44%	0.59%	0.35%
Israel	1.68%	3.14%	2.50%	4.86%	1.88%	3.34%	3.19%	1.40%	1.88%	1.38%	1.04%
Luxemburg	0.62%	1.07%	0.81%	0.41%	3.39%	0.34%	0.38%	0.32%	0.18%	1.41%	1.20%
Germany	17.97%	15.05%	15.75%	14.61%	13.19%	15.10%	10.86%	10.60%	10.70%	9.77%	8.91%
Russia	3.79%	3.10%	3.69%	2.99%	3.09%	2.95%	3.00%	3.19%	3.36%	2.64%	2.05%
Slovakia	0.74%	1.20%	0.86%	0.94%	0.68%	0.79%	1.15%	0.59%	0.84%	0.61%	0.50%
Sweden	2.75%	2.94%	3.06%	2.71%	3.07%	2.11%	1.97%	1.41%	1.12%	4.20%	0.80%
Turkey	0.38%	0.50%	0.83%	0.93%	1.02%	1.40%	0.79%	1.26%	0.85%	0.69%	1.04%
Ukraine	9.09%	11.38%	15.41%	21.74%	23.40%	25.89%	31.80%	35.78%	39.26%	40.85%	46.45%
USA	4.42%	2.79%	2.90%	2.24%	1.88%	1.68%	1.61%	1.08%	1.52%	1.32%	1.06%
Great Britain	9.05%	6.98%	6.64%	6.05%	5.71%	5.60%	4.36%	4.06%	2.40%	2.22%	1.88%
Vietnam	1.44%	1.59%	1.48%	1.15%	1.25%	1.84%	0.77%	1.26%	1.27%	0.77%	0.65%
Italy	4.97%	4.56%	4.55%	4.05%	3.81%	3.93%	3.58%	3.20%	2.86%	2.16%	2.05%
other countries	16.14%	15.38%	14.31%	14.12%	14.00%	13.80%	12.77%	13.42%	13.30%	11.11%	8.96%
TOTAL	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%

source: self-study based on the report of Ministry of the Interior and Administration (MSWiA) on execution of the act on real estate acquisition by foreigners in 2013 – 2023

According to data presented by the Ministry of the Interior and Administration, the Voivodeship of Mazovia remains the leading region where foreigners buy real estate, consistently holding the top position. However, its share dropped from 39.30% in 2013 to 32.75% in 2023. The percentage drop may result from the growing attractiveness of other Polish regions, as well as price increases, but Mazovia still remains a key market due to its capital location and well-developed infrastructure. The second most popular voivodeship in 2023 was Lower Silesia, with its share of foreign-owned residential space growing from 13.32% in 2013 to 16.39% in 2023. The Lesser Poland Voivodeship, with its centre in Cracow, has maintained a stable market share in the real estate market purchased by foreigners, fluctuating around 12-15%. In 2023, its share amounted to 12.37%, making it the third highest among all voivodeships. The Voivodeship of Silesia maintains a relatively stable share, hovering around 6-7% with slight fluctuations in different years. In 2023, Silesian Voivodeship accounted for 6.42%. Meanwhile, voivodeships such as Lubusz, Podlassia and Sub-Carpathia have a low share in the area of dwellings purchased by foreigners, with shares under 2%, likely due to lower investment appeal and fewer job opportunities compared to larger cities and western regions of Poland.

TABLE 3. STRUCTURE OF THE TOTAL AREA OF DWELLINGS ACQUIRED BY FOREIGNERS ON THE BASIS OF A PERMIT AND WITHOUT THE OBLIGATION TO OBTAIN A PERMIT DUE TO THE VOIVODESHIP, WHERE THE REAL ESTATE IS LOCATED IN THE YEARS 2013 – 2023

Voivodeship	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
The Voivodeship of Lower Silesia	13.32%	11.46%	10.94%	13.70%	13.37%	14.84%	14.33%	15.35%	16.39%	15.48%	16.39%
The Voivodeship of Cuiavia & Pomerania	2.16%	2.12%	1.85%	2.54%	2.58%	2.05%	2.56%	2.50%	2.16%	2.40%	2.40%
The Voivodeship of Lublin	1.27%	1.51%	1.75%	1.81%	1.49%	1.76%	1.76%	1.49%	1.38%	1.32%	1.65%
The Voivodeship of Lubusz	1.58%	2.60%	1.34%	1.49%	1.64%	2.02%	2.33%	2.74%	3.42%	3.21%	3.14%
The Voivodeship of Łódź	4.84%	2.95%	3.07%	2.34%	2.93%	2.84%	3.52%	4.85%	4.56%	4.17%	4.25%
The Voivodeship of Lesser Poland	8.76%	12.12%	12.62%	15.29%	15.98%	14.38%	14.26%	14.63%	11.57%	11.45%	12.37%
The Voivodeship of Mazovia	39.30%	35.58%	37.63%	35.92%	35.11%	35.88%	34.52%	31.08%	31.81%	32.75%	30.54%
The Voivodeship of Opole	1.94%	1.29%	1.38%	1.43%	1.60%	1.28%	1.66%	1.67%	1.67%	1.78%	1.76%
The Voivodeship of Sub-Carpathia	0.98%	0.86%	1.33%	1.31%	0.94%	1.05%	1.05%	0.93%	1.16%	1.31%	1.32%
The Voivodeship of Podlassia	1.58%	1.15%	1.13%	1.21%	0.93%	1.02%	0.85%	1.10%	1.26%	1.26%	1.20%
The Voivodeship of Pomerania	6.08%	9.93%	7.24%	5.82%	5.12%	5.22%	5.15%	4.17%	4.43%	4.37%	5.23%
The Voivodeship of Silesia	5.10%	6.58%	6.92%	6.76%	6.50%	6.30%	6.24%	5.59%	6.55%	6.50%	7.13%
The Voivodeship of Kielce	0.41%	0.55%	0.40%	0.31%	0.47%	0.39%	0.34%	0.54%	0.34%	0.33%	0.36%
The Voivodeship of Varmia and Masuria	1.80%	1.76%	1.41%	1.04%	1.42%	1.46%	1.28%	1.33%	1.14%	1.14%	1.53%
The Voivodeship of Greater Poland	3.90%	4.41%	5.60%	4.06%	4.32%	4.27%	5.36%	6.91%	7.78%	8.12%	7.62%
The Voivodeship of Western Pomerania	6.98%	5.12%	5.40%	4.98%	5.61%	5.24%	4.82%	5.13%	4.37%	4.41%	3.48%
TOTAL	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%

source: self-study based on the report of Ministry of the Interior and Administration (MSWiA) on execution of the act on real estate acquisition by foreigners in 2013– 2023

In recent years, there has been a significant increase in the share of real estate purchases by foreigners in regions outside the main cities. While in 2013, foreigners bought 1 214 residential properties in regions beyond key metropolitan areas, by 2023 this figure had surged to 7 508, marking more than a sixfold increase. The share of these “other regions” grew from 39.38% in 2013 to 52.34% in 2023, reflecting a growing trend of foreign investment outside Poland’s biggest urban centres. Throughout the entire analysed period, Warsaw remained the most popular city where foreigners bought real estate. Although the Warsaw’s share of overall transactions dropped from 29.29% in 2013 to 18.17% in 2023, it still holds the top spot. Cracow follows as the second most favoured city for foreign buyers. In 2023, among premises purchased by foreigners, dwellings in Cracow accounted for 10.49% of all transactions. Lodz has seen a noticeable increase in the participation of foreigners in real estate purchases, rising from 2.76% in 2019 to 3.85% in 2023. Wroclaw also recorded an rise in interest, especially in 2016 and 2018, when its share was over 10%. More recently, the share of Wroclaw has stabilized at around 8.5% of all transactions.

TABLE 4. NUMBER OF ENTRIES TO REGISTERS REGARDING DWELLINGS PURCHASED BY FOREIGNERS ON THE BASIS OF PERMITS AND WITHOUT OBLIGATION TO OBTAIN THE PERMISSION ACCORDING TO CITY IN WHICH DWELLING IS SITUATED IN 2013 – 2023

City	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
Gdansk	3.73%	3.25%	2.74%	2.84%	2.72%	2.41%	2.67%	1.71%	2.03%	1.83%	1.78%
Gdynia	1.52%	1%	1.09%	1.03%	0.81%	0.81%	0.65%	0.47%	0.54%	0.56%	0.33%
Gorzow Wielkopolski	0.71%	0.72%	0.51%	0.30%	0.48%	0.70%	0.55%	0.89%	1.03%	0.88%	0.86%
Cracow	8.86%	12.30%	12.60%	14.97%	15.24%	13.29%	13.06%	12.07%	10.19%	9.51%	10.04%
Lodz	3.21%	2.78%	2.64%	2.13%	2.53%	2.14%	2.76%	3.67%	3.87%	3.66%	3.85%
Poznan	2.27%	3.04%	3.94%	2.65%	2.70%	2.26%	2.25%	2.66%	2.66%	3.17%	2.91%
Szczecin	2.40%	3.50%	1.86%	1.48%	1.82%	1.32%	1.20%	0.98%	0.79%	0.90%	0.72%
Swinoujscie	1.07%	1.25%	0.93%	0.90%	1.04%	0.85%	0.81%	0.94%	0.59%	0.61%	0.41%
Warsaw	29.29%	25.63%	26.80%	27.02%	25.16%	25.29%	21.33%	20.57%	21.84%	17.79%	18.17%
Wroclaw	7.43%	8.01%	7.35%	10.52%	9.93%	10.46%	8.98%	9.94%	8.82%	8.68%	8.56%
Zakopane	0.13%	0.16%	0.27%	0.28%	0.29%	0.07%	0.09%	0.01%	0.04%	0.01%	0.03%
other	39.38%	38.36%	39.26%	35.86%	37.29%	40.39%	45.65%	46.09%	47.60%	52.41%	52.34%
TOTAL	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%

source: self-study based on the report of Ministry of the Interior and Administration (MSWiA) on execution of the act on real estate acquisition by foreigners in 2013 – 2023

Increase in the number of residential properties bought by foreigners in Poland is influenced by several key factors. Foreign investors continue to find the Polish housing market appealing due to comparatively lower property prices than in other EU countries, especially in major cities. Increasing property values, especially in larger urban areas, offer attractive profit opportunities for foreign buyers. Moreover, citizens from politically or economically unstable countries view real estate purchases in Poland as a means of securing their assets. Poland has also become a popular destination for emigrants from Belarus and Ukraine, who, after achieving career stability, often decide to buy their own property. Polish regulations on the acquisition of real estate allow the purchase of property without major formalities for citizens of the European Union. Even for non-EU citizens, including Poland’s eastern neighbours, the process of obtaining permission to purchase real estate is simplified and feasible, particularly with a long-term stay in Poland. This trend is expected to lead to a continued rise in the number of foreign property buyers in the future.

Marta Polkowska
SARFiN System Data Administrator
Senior Maintenance and Development Specialist

The percentage of people renting dwellings in Poland remains relatively low (it amounted to only a few percent), although the rental market (both private and institutional) is steadily developing. According to Eurostat data as for 2023, 4.2% of Poles lived in apartments rented on market terms. It’s not much, but comparison of Poland’s recent result with statistics for the year 2009 showed almost a twofold increase. The development of rental market, concentrated mainly in the largest agglomerations, was the result of increasing occupational mobility of Poles, who don’t intend to establish lasting ties in particular location. Constantly rising property prices, high mortgage interest rates and high downpayment requirements cause that many people, especially the young, cannot afford to buy their own flat. On the other hand, the offer of flats for rent is currently substantial, as low interest rates and high inflation together with negative interest rates in real terms have encouraged in recent years to look for alternative to bank deposits forms of capital investment and to invest in apartments for rent.

Two types of rental agreements are available in Poland: common (for a fixed or indefinite period) and occasional. Occasional rental is becoming more popular year by year. According to data from the Ministry of Finance, in 2022 there were 66 293 taxpayers (by 43.72% more than a year earlier) that reported income from an occasional rental agreements taxed as a lump sum and 4 819 taxpayers (by 38.40% more compared to 2021) reported such agreements taxed under PIT-36.

NUMBER OF TAXPAYERS REPORTING THE CONCLUSION OF AN OCCASIONAL LEASE AGREEMENT

source: own study based on data from the Ministry of Finance

However, common rental agreement is still the most often chosen, probably due to its simplicity, as it is enough to specify the property, the duration of agreement and the rent amount , while everything else results directly from the law. Occasional rental, although it supports landlords in dealing with unreliable tenants, accounts for only a small percentage of the market. In 2022, the number of taxpayers declaring income from occasional rental accounted for only 7.5% of all taxpayers reporting income from private rental (this applies to agreements taxed as a lump sum). Occasional rental agreements are also not very popular among students. In the latest survey, only 10% of respondents indicated this form of tenancy, while among private rental agreements (excluding decisions on accommodation in student dormitories and institutional rental agreements) – 13%.

Such a low share of occasional rental agreements may be the result of not enough knowledge in this area among both landlords and tenants. This is confirmed by this student survey, which showed that as many as half of the respondents do not know what the term of ‘occasional rental’ means. Moreover, awareness of the existence of such type of rental agreement has not increased over the past year. Another 22% of respondents are familiar with the concept but have a negative attitude towards it, and only 28% (only by 1 percentage point more than a year ago) would have no objections to concluding an occasional rental agreement.

STUDENT ATTITUDE TOWARDS OCCASIONAL RENTAL

source: Report ‘Students on residential market’ edition 2024

What is the occasional rental?

The occasional rental was introduced into the Polish legal system on December 17, 2009 by an amendment to the Act of June 21, 2001 on the protection of tenants’ rights, municipal housing stock and amending the Civil Code, which came into force on January 28, 2010. This is a special form of residential property rent created to increase (in comparison to common agreements) the protection of property owners against dishonest tenants, who are obliged by the law to move out in case when they do not pay the rent or when they refuse to leave the apartment after the lease agreement has ended.

Characteristic features of occasional rental

1. It may only be concluded in a form of a written civil law agreement, falling which it will be invalid (contrary to common agreement, which can be concluded orally).
2. The owner cannot be a professional market participant in the area of renting dwellings (most often it is simply a natural person).
3. The tenant is a natural person (exceptionally, the tenancy agreement may be concluded by a sole proprietorship, but for his or hers own housing needs).
4. The contract is only for a specified period, no longer than 10 years (unlike a common rental agreement, the occasional rental agreement will not automatically extend after the expiration of the agreed rent period).
5. The owner is required to report the rental to the tax office, which allows to benefit from preferential tax rates.
6. The conclusion of the agreement may depend on the tenant paying a deposit, but it cannot be higher than six times the monthly rent.
7. The owner may change the rent (e.g. indexation based on the inflation rate) only under the conditions specified in the agreement.

Occasional rental agreement – what should it include?

The Act on the protection of tenants’ rights defines the procedure of signing the agreement and specifies the necessary attachments.

To conclude an occasional rental agreement, the tenant should provide:

• the tenant’s statement in the form of a notarial deed on voluntary submission to enforcement and the obligation to empty the premises within the time limit indicated in the request, as well as to cover any fees arising from the agreement;
• a written tenant’s statement indicating an address, where he or she can reside in the event of starting the enforcement proceedings;
• a written statement of an owner of the property indicated by the tenant in the abovementioned statement or of the person holding legal title to that property on consent to the tenant’s residence in case of starting the enforcement proceedings.

A condition for concluding the occasional rental agreement is also its notification by the landlord to the tax office within 14 days from the start of the rental period. At the request of the tenant, the owner is obliged to provide confirmation of the notification to the tax office.

If any of the aforementioned requirements is not met, the occasional rental agreement will be treated as a common rental agreement without the expedited enforcement process.

When can an occasional rental agreement be terminated?

The lack of enthusiasm to occasional rental agreements and thus their low popularity may result from insufficient knowledge regarding the possibilities for terminating such rental. Tenants often believe that eviction is more likely in this type of rental than in a common rental. The phrase ‘easier eviction’ generates fear, and because only few potential tenants make the effort to understand the entire procedure, most people are afraid of being unexpectedly evicted for trivial reasons. Meanwhile, the terms of termination are clearly defined in the law.

A rental agreement, whether traditional or occasionally, can be terminated in the following situations:

• when a tenant, despite a warning, continues to violate the rules of using the apartment (using the premises in contrary to the agreement conditions or causes damage) or disrupts the peace of the other residents of the building;
• when a tenant is overdue on rent or other payments for at least three full payment periods (typically months), despite a written warning and adding one more month to regulate the outstanding payments;
• when a tenant conducts a sublease or gives free access to the apartment or part of it to the third parties without the landlord’s permission;
• on terms specified in the agreement (parties of the agreement may define the specific cases, in which early termination of the rental agreement is possible, such as tenant’s loss of employment or employment in another city);
• due to unforeseen circumstances – in case of circumstances that make it impossible to use the premises, such as its destruction.

In addition, an occasionally rental agreement provides for one more reason for eviction: when the tenant has lost the possibility of moving into premises indicated as ‘emergency’ in the appendix to the agreement and has not proposed an alternative address.

Advantages and disadvantages of occasional rental

For property owners, one of the key challenges is to carefully draft the agreement. Although occasional rental is intended for non-professionals, the procedure is quite complicated and requires knowledge, among others, what should be included in such an agreement.

For tenants, the requirement to provide a declaration in the form of a notarial deed and to indicate the address for possible eviction may be a significant problem. Not every tenant is able to meet this requirement.

Concluding an occasional rental agreement requires participation of a notary, so additional cost should be taken into account. However, the fee for preparing the deed of submission to enforcement has been limited by law at 10% of the minimum wage, i.e. PLN 430 in 2024. This amount should be supplemented by the fees for copies of the deed and possible certification of the signature on the statement indicating the address for relocation. These fees can be paid by either the landlord or the tenant.

And what about benefits? First of all, it is much easier to enforce rights to the flat when it is necessary to evict a problematic tenant. Occasional rental also allows for the eviction of pregnant women and parents with children, which is beneficial not only for owners of flats, but also for people with this status. Before the introduction of regulations on occasional rental, landlords often avoided renting apartments to parents with children and other people who were granted additional legal protection. This form of rental does not provide complete protection, but investing time and resources to complete the entire procedure makes this form of rental more stable and durable in comparison to common rental agreements, which is also a benefit for tenants. An occasional rental may also mean a greater offer of apartments and more favourable rental conditions. Landlords are often more open to negotiations, considering their better legal protection.

As we can see, despite some disadvantages, occasional renting also offers benefits for both parties and a fair tenant, who pays all dues on time, has no reasons to worry — the law protects him against the termination of the agreement without justified cause.

Agnieszka Pilcicka
Real Estate Market Senior Analyst

Climate change is one of the most significant challenges the modern world faces. We are increasingly experiencing extreme weather events, such as heavy rainfall, floods, droughts, heatwaves, hurricanes and wildfires. The summer of 2023 brought extreme heatwaves across Europe, particularly in the southern regions of the continent. Spain and Italy recorded temperatures exceeding 45°C, with a record-breaking 48.8°C in Sicily, the highest ever recorded in European history. Poland is also experiencing extreme weather events: on August 19 and 20 of this year, measuring devices in the Bielany district of Warsaw recorded daily rainfall levels of 119 mm, equivalent to nearly 120 litres of water per square meter. These drastic changes affect not only ecosystems and nature, but also daily life, including its economic aspects. Understanding how climate change may impact property values, as well as safety and quality of life, is becoming crucial for informed decision-making in the housing market. The risk of property value depreciation or significant increases in maintenance costs are just some of the challenges today’s buyers face.

In the context of this article, the term “climate risk” refers to the threats posed by observed climate changes that could negatively affect the future value, safety, or usability of a property.

These risks may manifest in many ways in the future. As market participants’ awareness grows, properties located in areas with an elevated risk of extreme weather events or their consequences may be perceived as less attractive. Even if this risk is not seen as immediate, the awareness of it may lead to decreased interest and, consequently, lower property values. Properties exposed to damage from floods, strong winds, storms or wildfires may require frequent repairs and maintenance, which will increase their upkeep, insurance or financing costs. Extreme weather conditions may lead to disruptions in energy, water or communication supplies, reducing the quality of life for residents and the investment appeal of the region, thereby diminishing the desirability of living in that area. This, in turn, may lead to migrations and further economic degradation of the region, with all the related consequences for property values.

It is important to recognize that this risk will materialize not only in distant corners of the world – Polynesia, Bangladesh, the Netherlands, Australia or California. In Poland, too, there are areas with a high probability of experiencing phenomena related to climate change. Coastal regions, particularly Pomerania, including the Vistula Delta and the Hel Peninsula, are at risk due to rising Baltic Sea levels. River valleys are vulnerable to flooding caused by heavy rainfall, while central Poland faces the threat of droughts and water shortages.

So how can one minimize this risk? Above all, it is essential to invest time in gathering and familiarizing oneself with information on several key issues.

When verifying the location of a property, attention must be paid primarily to flood and waterlogging risks, considering coastal areas, as well as regions already experiencing drought and water availability problems. It is also worth analysing the location at a “micro” scale by assessing the immediate surroundings of the property and its physical characteristics.

Until 2018, Polish law allowed residential construction in flood-prone areas and there are many such properties. Therefore, if you plan to purchase a house near water reservoirs, it is important to check whether the property is located in an area prone to flooding. This applies not only to the vicinity of major rivers, but also to smaller watercourses. Similarly, if you want to buy property by the sea – while Poland is currently less threatened by rising sea levels than other countries – some areas of the Baltic coast may experience the effects of this phenomenon, such as coastal erosion, groundwater salinization, and increased flood risks. It is also advisable to check the presence and quality of protective infrastructure, such as flood embankments or stormwater drainage systems.

For properties located in areas susceptible to drought, it is important to assess the efficiency of local water sources and the effectiveness of water supply management systems. It is also advisable to check if there have been any past problems with water supply in the chosen location.

At the “micro” scale, attention should be paid to the characteristics of the property’s surroundings, which will affect the quality of life. The density of buildings around the selected property should be verified (including building heights) and whether proper ventilation for the area is ensured. The amount of green space and the presence of tall trees in the vicinity are also critical. This is important not only for rainwater absorption in the event of heavy downpours or protection against strong winds, but also for mitigating the urban heat island effect, which not only reduces comfort, but may also, especially with increasingly frequent heatwaves, pose serious health risks to residents.

Potential buyers should also consider the physical features of the property. The use of modern solutions, such as energy-efficient heating and cooling systems, green roofs, façades made of low-absorption materials, windows with low heat transmission, rainwater recovery and utilization systems, as well as renewable energy solutions, will lower property maintenance costs and increase its resilience to changing climate conditions. For older properties, purchasing decisions should be preceded by a calculation of the costs of necessary renovations.

Minimizing climate risk when buying a home requires informed and thorough analysis. In a rapidly changing environment, drawing conclusions solely from the past is no longer sufficient. Climate risks are a very significant and entirely new factor shaping property values, and their impact on the real estate market, already evident today, will become increasingly important over time.

Jerzy Ptaszyński
Research and Market Service Director

Real estate flipping has become an extremely popular investment strategy worldwide in recent years. This phenomenon, initially developed in the United States, is gaining increasing popularity in Poland as well. This type of investment strategy attracts both experienced investors and newcomers to the real estate market. Why has it gained such popularity, and what factors influence the development of this market? What are the key steps in the flipping process, and what risks should one be prepared for?

Real estate flipping is a strategy of quickly reselling houses or residential units after their renovation/modernization. Therefore, a flipper is an unofficial name for entities operating in an organized manner whose goal is to purchase properties at a bargain price, then make changes that increase their value and quickly sell them for a profit.

The flipping process consists of several key stages, each requiring careful planning and execution. Choosing the right property is the foundation of success in flipping. The most important factors when selecting a property are:

• Location – It is a key element determining the value of the property. The most valuable are properties located in developing districts with good infrastructure, proximity to schools, shops, and well-developed public transportation.
• Technical condition – Flipping avoids properties requiring general renovation. Properties that can be quickly and cheaply renewed are selected.
• Price – It should be below their market value. Seeking opportunities such as properties from foreclosure auctions or sales with legal issues is a common practice among flippers.

Finding appropriate financing is very important in real estate flipping. The most popular method of financing property purchases is a mortgage loan. Some banks and financial institutions offer short-term loans, which are also a common choice. If a flipper is advanced in their activity and demonstrates experience, they may look for private investors who are willing to invest in projects in exchange for a share of the profits.

The next stage is renovation, which can ultimately determine the final profit. For a flipper to carry it out as rationally as possible, they should have a realistic budget planned, use proven, reliable contractors, and have a modernization plan. Decisions about which elements should be modernized should primarily be based on their impact on the property’s value. Although flipping potentially seems profitable, it is also associated with risks (e.g., improper cost estimation).

The final stage is the sale of the property. Marketing is crucial at this stage, and listings with professional photos of clean apartments with staging are sure to catch the eye and seem more attractive to seekers. It happens that flippers cooperate with real estate agents, which can significantly speed up the sales process.

What has contributed to the rise in the significance of real estate flipping? Primarily, it has been economic changes that have created favorable conditions for this type of investment:

• Low interest rates – encouraged investors to take out mortgage loans, facilitating the financing of property purchases.
• Rising property prices – the increase in property values in many regions has meant that investors could expect quick profits from the sale of renovated homes.
• High demand for apartments – the growing number of people looking for apartments, especially in larger cities.

Additionally, psychological aspects have a significant influence on the popularity of this phenomenon. The main motivation for many investors is the prospect of achieving high profits in a relatively short time.

Flipping, like any industry, is subject to the influence of various economic, social, and technological factors. What might be the future of flipping in Poland, considering current trends and forecasts for the coming years?

One of the processes affecting this investment strategy is urbanization, and consequently – the growing interest in apartments in large cities, driving demand in the real estate market. Urbanization is also associated with investments in infrastructure (e.g., new metro lines/stations), increasing the attractiveness of certain districts, which can bring additional profits to flippers. However, it should be remembered that apart from large cities, smaller towns are gaining importance, especially those well-connected with larger agglomerations. Investing in such locations can bring profits due to lower purchase prices and growing demand.

The Polish real estate market is strictly regulated by legal provisions, which can affect flipping. The most recent event was the enactment of the new developer law, where some regulations were directed at flippers. The main goal of this law was to increase the protection of home buyers, including regulations concerning reservation agreements, particularly in terms of the required written form, maximum reservation fee, and refund of the fee in case the buyer does not obtain a loan or the entrepreneur does not fulfill the contract. Taxes and potential changes in their regulations (such as property tax or VAT) will also have a direct impact.

In real estate flipping, technology plays an increasingly important role. Investors using various tools can increase the efficiency of their activities, e.g., using Big Data – thanks to analytical tools, one can better predict market trends and identify the most profitable locations and properties.

In summary, the popularity of real estate flipping results from a combination of favorable economic conditions, investor psychology, and the availability of modern technologies. All these factors together have made flipping an attractive and increasingly common investment strategy. Although the future of real estate flipping in Poland seems promising, it will require adaptation to dynamic market, technological, and regulatory changes.

Karol Kacprzak
AMRON IIIProject Manager
Analyst and System Development Specialist

The concept of “15-minutes cities” was proposed by Sorbonne urban planner Carlos Moreno. He encourages the creation of cities where residents have access to all essential services, jobs, schools, parks and entertainment within 15 minutes on foot or by bike. The proposed approach aims to improve the quality of life for residents, reduce traffic and decrease CO2 emissions by reducing dependence on cars. Increasingly, cities around the world are experimenting with this concept, making changes in urban planning and infrastructure to better meet the needs of citizens. In a model city of the 15-minute city idea, the centre features a market square, which is the heart of the city, where pedestrian walkways dominate and car traffic is limited. Historical buildings are renovated and repurposed for cafes, restaurants and meeting places, while new buildings are designed according to sustainable development principles. According to this vision, every residential neighbourhood is designed with social diversity in mind and is self-sufficient (including a supermarket, pharmacy, school, health care centre and playground for kids). Another characteristic of such a city is a well-developed network of bike paths and sidewalks, and public transportation is eco-friendly and modern. Public spaces are designed with residents’ physical activity and recreation in mind.

source: https://www.weforum.org/agenda/2022/03/15-minute-city-stickiness/)

Below are examples of cities taking steps towards implementing the 15-minute city idea. These cities serve as examples for others worldwide, inspiring the creation of more sustainable and resident-friendly urban environments.

Paris – one of the pioneers in implementing the 15-minute city concept. The city authorities of Paris focus on creating pedestrian and cyclist-friendly public spaces and promoting local shops and services.

Melbourne – a city striving to create a more sustainable urban development model by enabling residents to access all essential services quickly. Through the development of a tram network, bike paths and the promotion of public spaces, the city is becoming more pedestrian and cyclist-friendly.

Portland – developing infrastructure for pedestrians and cyclists and promoting mixed-use areas, making it easy for residents to access work, shops and entertainment within 15 minutes.

Stockholm – the city authorities are taking measures to improve quality of life by increasing access to services and jobs for residents. Investments in public transportation, bike infrastructure and the creation of public spaces aim to provide quick and convenient access to all essential services within 15 minutes.

Pleszew – a 17 000-inhabitant city in Greater Poland often referred to as Poland’s first 15-minute city. It is an example of a compact city offering everything residents need close at hand.

Rzeszów – one of the most dynamically developing cities in Poland. Rzeszów is incorporating elements of the 15-minute city concept into its urban strategy. In the future, Rzeszów aims to consist mainly of multifunctional and compact districts that will reduce the need for long commutes.

Cracow – another city in Poland where initiatives related to the 15-minute city concept have emerged. The city authorities plan to create spaces where residents have easy access to all necessary services and attractions, such as shops, parks, cultural centres and workplaces.

The city concept proposed by Carlos Moreno has both supporters and opponents. The main arguments presented by both sides are gathered and described below:

Advantages:

Disadvantages:

Proximity of services and attractions – reduction of residents’ need for cars by providing easy access to most services and workplaces. Promotion of a healthy lifestyle – improvement of residents’ physical condition through walking or cycling to cover distances. Reduction of air pollution – decrease of the number of cars on the roads. Increased social interaction. Reduced costs related to the demand for expanding road infrastructure. Stimulation of the local economy. Increased public space – reallocation of areas previously reserved for cars.

High initial costs due to the need for city reorganization. Limitation of connections to more distant areas of the city as a result of focusing on local traffic. Potential overload of selected areas due to increased pedestrian and bicycle traffic. Possibility of excluding elderly and disabled individuals if the needs of certain social groups are overlooked during the creation of a 15-minute city.

Summary

The concept of the 15-minute cities aims at creating sustainable and environmentally-friendly cities that address the challenges of contemporary urban planning. The trend is gaining popularity as it can contribute to improving the quality of life in cities. Reducing commute times means that residents can use the saved time for personal development or entertainment, leading to increased comfort and reduced stress levels. However, this is a long-term process. In the future, more cities in Poland will attempt to incorporate this concept into their development strategies. It is important to remember that this requires time, financial investments and collaboration across various sectors. Large cities will need to invest in expanding transportation infrastructure, developing public transport and ensuring an adequate number of services and public spaces. The participation of the local community in the planning and decision-making processes concerning the city’s future will also be crucial. Despite many challenges, the prospects are promising and Polish cities have significant potential to create more sustainable, ecological and comfortable living environments for their residents.

Klaudia Jastrzębska
Senior Analyst, GIS Analyst

Population aging is a demographic phenomenon characterized by an increasing proportion of elderly people in the population. It is caused by both longer life expectancy and low fertility rates. On one hand, the favourable phenomenon is that people live longer thanks to advances in medicine, better access to healthcare and improved living conditions. This means that the number of elderly people in the population is growing, indicating an improvement in quality of life and health in society. On the other hand, low fertility rates, which means an insufficient number of births, exacerbate the aging process. Social changes in recent years, such as delaying the decision to have children to later years, fewer children per family, as well as economic factors such as the rising costs of raising children and economic uncertainty, contribute to the decline in birth rates. Fewer children mean that younger generations are smaller, which in the long term leads to a decrease in the number of working-age people. This can cause several social and economic problems, such as labour market shortages, burden on pension and healthcare systems and changes in social structure.

According to data from the Statistics Poland (GUS), the current aging index accounts for 133, which means that there are 133 “grandparents” (people aged 65 and over) for every 100 “grandchildren” (children aged 0-14), with a population difference of 1.9 million in favour of the elderly.

SHARE OF PEOPLE AGED 60 AND OVER IN THE TOTAL POPULATION

source: GUS

According to the assumptions of the demographic forecast developed by the Statistics Poland, in the assumed perspective there will be a significant decrease in the number of children and adults, while the number and proportion of seniors will increase. The number of people aged 65 and over will rise – it is prognosed that by 2060 there will be over 2.5 million more people aged 65 and over than in 2022 (an increase of 34.2%). A significant increase in the number of people aged 80 and over is also expected – by 2060, their number will more than double compared to 2022.

Population aging poses numerous challenges for cities but also opens up opportunities to create more inclusive, accessible and senior-friendly urban environments. It will be crucial to adapt urban spaces to the needs of older people, as in 40 years half of Europeans will be mature and will need a place where they feel not only safe, but also welcomed.

The dominant concepts in Europe regarding population aging, according to the OECD, i.e. “active aging” and “aging in place”, are key to understanding the housing policy, services and spatial planning. Both concepts are essential for creating friendly urban spaces and implementing sustainable development strategies.

“Active aging” is a concept that promotes maximizing the health, social and cultural potential of older people, ensuring their active participation in social, economic, cultural and civic life.

“Aging in place” is a concept that assumes older people should have the opportunity to live in their homes and familiar communities as long as possible, with appropriate support and services that enable them to maintain independence and quality of life.

The concepts of “active aging” and “aging in place” are crucial for the sustainable development of cities in Europe. Integrating these concepts into urban, housing and service policies allows to create spaces that are friendly and accessible to older people while promoting their activity and social integration. This way, cities can better address the challenges associated with population aging and promote sustainable development for all residents.

Several key aspects to consider when planning cities with the needs of older people in mind include:

1. Accessibility and Mobility:

• improvement of public transportation: easily accessible transport means, such as low-floor vehicles, frequent schedules, routes adapted to seniors’ needs, bus stops with benches and shelters;
• safe pedestrian crossings: adapting road infrastructure, including traffic lights, to the needs of people with limited mobility (longer signal duration for slower movement, well-marked and well-lit crossings);
• reducing architectural barriers: even sidewalks, ramps instead of stairs, low curbs.

2. Greenery and Public Spaces:

• spatial planning: creating friendly, accessible, and green urban spaces that promote physical and social activity;
• parks and green areas: easily accessible, with seating areas and paths adapted for people with limited mobility;
• benches and rest areas: regularly placed throughout the city, especially on walking routes and in parks.

3. Safety:

• street lighting: good lighting on streets, pedestrian crossings, and public places;
• eoad safety: creating spaces designed for easy and safe travel on foot or by bike through a dense network of well-designed pedestrian crossings (thoughtful traffic organization, speed bumps, designated bike paths).

4. Housing:

• construction and adaptation of housing stock: modernizing apartments and buildings to meet the needs of older people, e.g., installing ramps, elevators, grab bars in bathrooms, as well as adapting older buildings to accessibility standards (buildings with wide corridors and doors, bathrooms adapted for people with limited mobility, step-free entrances);
• assisted living: housing options for seniors requiring care or support but wishing to maintain independence, e.g., development of senior communities (designed for older people, with access to healthcare, recreation and services);
• home safety: implementing technologies and systems that support safety, such as smart homes.

5. Services and Healthcare:

• proximity of services: planning integrated spaces in the city and surroundings that are close to residential areas (shops, pharmacies, clinics, banks, and other daily services);
• healthcare services: building and developing healthcare facilities tailored to the specific needs of older people, easy access to clinics, hospitals, preventive and rehabilitation programs;
• care services: development of local care services, such as home help, nursing, meal delivery.

6. Community and Integration:

• recreational and cultural facilities: developing infrastructure that supports physical, mental, and social activity for seniors, such as senior centres, senior clubs, theatres, libraries;
• lifelong learning: educational and training programs that enable older people to acquire new skills and develop interests;
• continued employment: providing opportunities for older people to continue working, making them feel socially useful.

7. Technology and Information:

• technological education: courses and workshops teaching seniors how to use modern technologies;
• easily accessible information: clear signage and easily accessible information about city services, events, and support options, up-to-date information at bus stops and in vehicles.

Many cities around the world are taking initiatives to create friendly environments for the aging population. These include Manchester, The Hague, Tokyo, Copenhagen and Barcelona. Many cities in Poland also have support programs for seniors aimed at improving their quality of life and ensuring safety and assistance in daily tasks. One such program is “SOS for Seniors” conducted in Lublin. This initiative aims to provide quick help in emergencies through a wristband worn on the wrist. Each wristband is equipped with a heart rate monitor, fall sensor, and GPS locator. In case of an emergency, one can press the appropriate button on the watch and a signal is sent to the care centre, which responds appropriately to the alert.

Population aging poses numerous challenges for cities, but also opens up opportunities to create more inclusive, accessible, and senior-friendly urban environments. Creating a city friendly to older residents requires the involvement and cooperation of various sectors and interest groups, including city authorities, urban planners, non-governmental organizations and the seniors themselves. It is essential to adopt a holistic and proactive approach that considers the needs of all residents, regardless of age. Only in this way can we ensure that urban spaces are safe, accessible, and conducive to active aging.

Monika Grążawska
Senior Customer Relations Specialist

High housing prices and declining rental investment profitability in Poland, along with the desire to secure capital or a potential place of emigration in politically uncertain times, are prompting more and more Poles to look for real estate abroad. Among the countries most often chosen by Polish buyers are Southern European countries – Italy, Portugal and Spain. According to Registradores de España data, last year Poles purchased 3 118 properties in Spain, slightly more than in 2022, when there were 2 973 transactions concluded. In the first quarter of this year, there were already about 800, indicating at least a maintained pace of purchases from the previous two years. Moreover, Poles have also been among the nationalities allocating increasingly larger sums to investments, with a year-on-year increase (2023/2022) of nearly 18%.

Despite rising prices and high interest rates, in 2023 the Spanish real estate market performed much better than expected. Although the number of transactions was about 10% lower than in the record year of 2022 (650 000), the result was significantly better than forecasts. This was mainly due to the sustained high level of interest from foreign buyers and investors. In recent years, foreign buyers have accounted for approx. 14% of all property buyers on the Spanish real estate market. The largest group of buyers in Spain for years has been the British, who in 2023 purchased nearly 10% of all properties bought by foreigners. Significant groups of buyers also included Germans, French and Romanians, as well as investors from outside Europe, including Moroccans, Chinese and a considerable group of investors from South America. Poles accounted for about 4-5% of purchases made by non-residents in 2023.

The Valencian Community attracts the most interest from foreign investors – in 2023, foreigners acquired 18 919 properties there, which accounted for nearly 30% of all transactions involving foreign buyers. Andalusia and Catalonia, as well as Madrid and the archipelagos – the Canary Islands and the Balearic Islands, also remain popular. The northern region of Asturias is becoming increasingly fashionable among foreign buyers, where last year, for the first time, over 700 transactions were recorded by non-Spanish buyers.

Demand forecasts for the coming years indicate its possible increase due to the expected decline in interest rates and, consequently, easier access to mortgage loans. There is also a high level of interest in Spanish real estate among foreign investors. The current price level is still attractive. In the second half of 2023, foreigners paid an average of EUR 2 715 per square meter of property, comparable to or even lower than the prices of apartments in the largest Polish cities. This amount was 6.1% higher than the average price recorded a year earlier. Despite this increase, investors are attracted by the high return on rental investment, especially short-term vacation rentals. However, the Spanish real estate market is significantly regionally diversified. Besides Madrid and the largest cities, the highest prices are usually noted in regions, where properties are attractive both to tourists and investors seeking rental returns.

On the supply side, the number of new investments is declining rapidly. In recent years, approx. 100 000 new homes were delivered annually. However, in 2023 there were only 80 000 and the forecast for 2024 is just 60 000. Spain is currently one of the European countries building the fewest homes per 1 000 inhabitants. Real estate price forecasts for 2024 predict a further 10% decline in the number of transactions, but the average purchase price is expected to rise by 1% to 3%, with new forecasts predicting a 4.1% increase in primary market prices in the first half of this year.

The rental market has also seen significant changes recently due to the Housing Law (Ley de la Vivienda) introduced in May 2023. The new regulations aimed primarily at effective rent control, particularly in high-demand areas, increasing tenant protection against eviction, and supporting landlords renting their properties at controlled rates through tax breaks and financial support programs. The law also introduced measures to reduce the number of vacant properties, including penalties for owners who do not rent their properties for extended periods. So far, the effects of the new regulations are far from the intended goals. The new rules have led to a 12% decrease in rental housing supply and nearly a 10% increase in rent levels.

Forecasts for the Spanish real estate market in 2024 and the following years seem to be quite optimistic. Stable economic growth, the prospect of falling interest rates and easier access to mortgage loans, limited property supply, and rental rates offering satisfactory returns – these factors currently create favourable conditions for foreign buyers and investors.

Purchasing real estate in Spain, despite its attractiveness, also involves certain potential risks and challenges. Spain has a complex legal and tax system, and regulations can vary by region. This is the case, for example, with the taxes due on real estate purchases, which are the largest additional cost a property buyer must bear. Their amount varies depending on the type of property, region, price or market type (primary/secondary).

On the secondary market, the basic ITP tax rate is 7% and progressive rates depending on the property value can range from 8% to 10%. In reality, tax rates range from 6% in Madrid to 10% in Catalonia or the Valencian Community. On the primary market, two taxes are due for property purchases: IVA (VAT) and AJD (documented legal acts tax). The IVA tax rate is 10%, while AJD tax rates are set locally and range from 0.5% to 1.5%.

Other significant property acquisition costs include notary fees and registration fees. The property sale deed is prepared by a notary, and notary service costs depend on the property value and usually account for up to few percent of the purchase price. The registration fee depends on the property value and usually amounts to several hundred euros. In addition to these fees, one must also consider fees for intermediaries or lawyers assisting in the transaction.

The main risks and challenges associated with acquiring real estate in Spain include ensuring proper property management after purchase and verifying the property’s legality.

Investors not residing permanently in Spain may face difficulties with managing properties remotely. Renting, maintaining the property and resolving legal and technical issues are challenges that will be difficult to meet without adequate support from local specialists. This, of course, means additional costs or risks that need to be considered when making investment decisions. A phenomenon that a potential investor should particularly pay attention to is the “okupa” – the occupation of a property, usually a vacant one, by illegal tenants without the owner’s consent. This phenomenon is mainly rooted in the limited availability of affordable housing, especially for young people, and a significant number of unoccupied properties further creates opportunities for potential “okupas.” It is estimated that across the country, as many as 150 000 properties may be illegally occupied (estimations as for 2021). Spanish law provides procedures for removing illegal tenants, but their implementation can be both costly and time-consuming, and removing unwanted tenants can be challenging.

Another significant risk to consider is the legality of the property you intend to purchase. The property may be built without a building permit or may not be intended for habitation. In some regions, the number of “illegal” properties may exceed 10%. This problem particularly affects properties located in tourist-attractive regions intended for rental. An investor seeking such properties should first vertify that the property has all the necessary documents, including a habitation permit.

Other risks associated with acquiring real estate in Spain do not significantly differ from the risks faced by buyers on other European markets. Political risk, legal risk, currency risk and risks related to property value changes are types of risks that investors encounter on every real estate market.

Therefore, both the current market situation and the rather optimistic prospects for its development in the coming years suggest that purchasing real estate in Spain could be a good idea for capital investment and achieving satisfactory returns. The Spanish real estate market offers many different opportunities, including investing in the well-developed segment of vacation properties. However, a potential buyer should conduct a thorough analysis, including not only the market situation or current price levels, but also tax issues, property maintenance costs and risks specific to the Spanish real estate market, which are practically non-existent in the Polish market.

Jerzy Ptaszyński
Research and Market Service Director

Property tax is one of the key sources of funds for local governments. It covers land, buildings and their parts, as well as structures related to running a business. In recent years, attention has been increasingly drawn to the problem of differentiating tax rates based on the type and purpose of the property. Many taxpayers wondered why their property tax rate for a garage was several times higher than their neighbour’s rate. This caused numerous controversies and protests from garage owners.

The problem was that garages attached to a residential premises (legally constituting part of this dwellings) were taxed at the rate for residential buildings, which in 2024 amounted to a maximum of PLN 1.15 per square meter of usable area. On the other hand, garages that were separate properties have so far been classified as other buildings (even if they were located in a residential building), for which the tax rate was a maximum of PLN 11.17 per square meter, i.e. ten times higher.

TABLE 1. PROPERTY TAX AMOUNT CALCULATED FOR A DWELLING AND A PARKING SPACE DEPENDING ON ITS LEGAL STATUS

	Usable area	Tax rate	Property tax
When the parking space is located in a garage that is a separate property
Dwelling	50 sqm	PLN 1.15	PLN 57.50
Parking space	25 sqm	PLN 11.17	PLN 279.25
Suma	PLN 336.75
When the parking space is attached to a residential dwelling
Dwelling	50 sqm	PLN 1.15	PLN 57.50
Parking space	25 sqm	PLN 1.15	PLN 28.75
Suma	PLN 86.25

source: own elaboration

Is that fair? A married couple who purchased a dwelling with a parking space in a multi-car garage separated as an independent non-residential unit with its own land and mortgage register, decided it was not and filed a complaint to the court. Ultimately, the Constitutional Tribunal took up the case.

Judgment of the Constitutional Tribunal

In its judgment, the Constitutional Tribunal ruled that differentiation of property tax rates for garages is inconsistent with the Constitution of the Republic of Poland, specifically with the principle of equality before the law and the principle of social justice.

The Tribunal argued that, from the point of view of tax law provisions, there are no grounds for garages in multi-apartment buildings to be treated as a non-uniform category. According to the judges, the tax rate is not determined based on the legal nature of the property right, but on the purpose for which it is used. Moreover, in the modern world, a parking space is considered a natural and even essential element of a dwelling, because it meets people’s basic housing needs. The same applies to other attached rooms, for example a basement, storage room or attic, even if they are not directly adjacent to the premises or even located in the building, but are only located within the boundaries of the land property. They are subject to taxation at rates provided for residential buildings. Additionally, regardless of whether a garage constitutes a separate property from the residential unit or is attached to it, it serves the same function.

The differentiation of tax rates for garages and other types of residential properties lacks substantive justification and leads to unfair financial burden on garage owners. Therefore, the Tribunal ordered the elimination of such differentiation and the introduction of uniform tax rates for all residential properties, including garages.

Status of work on the amendment of regulations

In response to the Commissioner for Human Rights’ intervention regarding work on the definition of a structure and clarifying the taxation rules for garages, on March 6th of this year, the Ministry of Finance assured that work in this area has already started. The aim of the legislative changes is to standardize the taxation rules for multi-car garages located in multi-apartment buildings.

It is planned that the new regulations will be published no later than the end of November of this year. However, as indicated by the Tribunal’s judgment, the unconstitutional provisions of the Act on Local Taxes and Fees will cease to apply from January 1st, 2025, so the next tax decision for 2025 will already take into account uniform rates for garages.

It is also worth noting that the Ministry of Finance does not currently plan to introduce systemic changes in property taxation (e.g., introducing a cadastral tax).

Consequences of the judgment

The judgment of the Constitutional Tribunal has significant implications for the tax system in Poland, both for garage owners and local governments. First of all, garage owners can expect a reduction in property tax rates, which in practice means lower financial burdens. This, in turn, may contribute to greater acceptance of the tax system and improved relations between residents and local authorities.

For local governments, the Tribunal’s judgment means the need to adjust local tax resolutions to new legal requirements. Municipalities will have to cease differentiation of tax rates for garages and introduce uniform rates for all residential properties. This means changing budgets and rethinking financial strategies to compensate for declines in property tax revenues.

Agnieszka Pilcicka
Senior Real Estate Market Analyst