Domiciles with style
As opposed to luxury apartments, however, most of them are popping up outside of major cities
With good locations in the central districts of big cities getting harder to come by, developers are increasingly looking for attractive areas in the suburbs to build stylish houses. According to industry analysts, this segment of the real-estate market will enjoy significant growth as the number of affluent Poles eclipses the number of such residences available on the market.
Luxury apartments and houses currently constitute 0.2-0.3 percent of the total number of new residences being delivered each year. In monetary terms, they account for 1.6-2.4 percent of the new-homes market.
According to Forbes, the combined fortunes of the 100 wealthiest Poles came to an estimated zł.82 billion at the beginning of 2007. Moreover, across Poland the amount being spent on luxury goods is growing annually. "The real-estate market in Poland, as every market segment, needs luxury products and so far it hasn't been satisfied," said Marcin Panek, a private banker at Noble Bank.
The meaning of luxury
When it comes to the luxury market, Poland is still catching up with Western countries, and the notion of what constitutes "luxury" is changing.
"The residential market is developing and a new meaning of luxury is now entering the public lexicon. Developers often describe residential developments as luxurious, while in fact they are only higher-standard buildings," said Hanna Siek-Zagórska, CEO of TS Invest, the company behind Tesoro Ivory Residences, the most exclusive single-family housing development in Poland.
"By luxury, we understand spacious houses, close contact with nature, a prime location and architecture in synch with its surroundings," Siek-Zagórska added. Tesoro Ivory Residences near Gdynia will offer a total of 49 luxury-standard houses. Each house will offer at least 500 sqm and will occupy a plot of around 0.5 ha.
"We can proudly say that this is the first project of its kind in Poland," stressed Hanna Siek- Zagórska. So far TS Invest has sold two of the residences and is negotiating with four more clients. Prices in the complex vary from zł.8-12 million.
Not everyone is convinced that TS Invest's approach to luxury homes will prove popular, however.
"Luxury houses have to compete with two new high-end products - lofts and skyscraper apartments," said Anna Głodek, a research manager at Reas. According to Głodek, the presumption that wealthy people want to live in exclusive communities with similar houses is not necessarily true.
"These people appreciate luxury, but they are also looking for uniqueness and so far have been building their homes according to custom designs," she added.
Other options
TS Invest is also thinking about entering the residential markets of other big Polish cities with similar projects. The suburban areas of Kraków, Poznań, Warsaw and Wrocław, however, are already hosting new housing developments which, while perhaps not as posh as Tesoro Ivory Residences, also aim to serve Poland's elite. Real Management's Rezydencja Chojnów, for example, is currently being constructed near Warsaw's suburb of Konstancin-Jeziorna. Already sold out, it comprises 30 houses priced from zł.1.8-3.5 million.
Westmark's Ventana project in Walendów, located 15 km outside Warsaw, is another development targeting the country's most demanding customers. "In the first stage we sold 40 homes out of 44," said Barbara Gardener from Westmark's marketing division. The houses in the neighborhood are priced between zł.1-4 million.
Further from the capital, the list of prestigious housing developments grows to include Terracasa's Parkowe Wzgórze near Kraków and Budmax's Osada Gencz outside Wrocław. However, despite growing interest analysts don't expect a large number of developers to shift their focus to the construction of luxury houses. "Apartments are still easier to sell and there is less risk involved," Reas' Głodek pointed out.
Luxury as an investment
When investing in such properties tenants are looking for more than just a secluded, relaxing location and closer contact with nature." A luxury house in Konstancin or Izabelin is also an investment that guarantees steady profits in the long run," said Noble Bank's Panek. "Insecurity on the market doesn't influence this sector," he added. Interestingly enough, luxury homes are attractive due to their relatively low price per sqm.
"One sqm in Ivory Residences costs around zł.10,000, while the average price of one sqm in the Tri-city area in July was around zł.7,000," said TS Invest's Hanna Siek-Zagórska.
But Reas' Głodek stresses the fact that in the long run, luxury apartments and lofts are not going to lose popularity. "Poor infrastructure is the reason why some people prefer to stay in the city," she said.
Nevertheless, Panek suggests that the value of luxury houses will keep growing as long as the demand for such properties exceeds supply.
The apartment factor
For those who feel most home in a city-center apartment, developers also have a long list of prominent locations. Sea Towers in Gdynia, Sky Tower in Wrocław and Warsaw's Platinum Towers, Prosta Tower and Orco's Złota 44 constitute only a small part of the list. Lilium, a subsidiary of BSR Europe, recently revealed its plan to construct a luxury residential development on the corner of ul. Chałubińskiego and Al. Jerozolimskie in the very center of the capital. The developer has invited four world-renowned architects to participate in the design of the 200-meter tall skyscraper.
Luxury apartments, besides serving as weekend getaways, are a solid investment. "The majority of our clients are looking for a weekend apartment, but some also plan to rent out their apartments during golf tournaments," said Ober-Haus' Katarzyna Pajàk, responsible for sales of Maexpa's Valley Golf Village.
Analysts believe that the share of "second home" developments will also see further growth. "Practically every luxury residential development in an attractive area is a safe investment," Głodek concluded.
