Fly to let
Steve Doran, a residential-market specialist with Bank Zachodni WBK, tells Lokale Immobilia about what investors look for and what they can expect when it comes to the residential market.
Michael Benjamin: What is the first step for your clients?
Steve Doran: Typically, a client might have been to Poland, or they have seen it mentioned at property trade fairs or on property television programs. [When it comes to mortgages] generally, they will ask, "how much can you give me?" as opposed to "I want EUR 100,000." We give them a few websites to look at and we've got a list of recommended developers. Then we'll arrange meetings for them with property management companies, lettings agencies, estate agents, tax specialists and developers.
Are your clients mainly investors or expats?
I would say 80-85 percent of them are now investors, with 70 percent English and Irish then maybe 10 percent Spanish/Israeli. The Dutch have started to come in as well.
Since Poland joined the EU the demand has gone up an incredible amount, there are seven of us now just dedicated to working with foreigners. When I first joined the bank we were talking about perhaps doing zł.20 million of business in a year and now we're doing EUR 35 (zł.135) million.
What size and price range are your clients typically interested in?
[Apartments of] 60-70 sqm attract the most interest, as these are ideal for renting out to young professional Poles and Polish couples.
The average mortgage would be EUR 80-90,000 (zł.309,600-348,300) and the property is probably worth EUR 120,000 (zł.464,400). Expats often live in more expensive areas and the average expat probably spends closer to zł.700-800,000 and would borrow zl.500,000.
[In the past 18 months] we've probably done around EUR 50 (zł.193.5) million worth of mortgages for investors, on about 400 transactions.
What are the main differences between your work here and in Western Europe?
Working in a bank in England or Ireland, if you do mortgage finance that's pretty much all that you do. Here you are not just a lender, you can be asked about a range of other issues. We try not to get too involved but we've certainly got the contacts for people to speak to the right English-speaking tax advisers, property management companies, lettings agencies; it's a very important part.
What are some of the anomalies and irregularities you see here?
Only six percent of GDP in Poland is tied up in mortgages. In Britain it's well above 60 percent, in Ireland that number is closer to 80 percent. This is a tiny amount and that will change over the next few years.
Also, in the West if you see a property you like you arrange a mortgage at your bank and then instruct your solicitor to act on your behalf to check the legal title. There is no one really to do that here; it's basically up to the buyer to sort it out. You only need a notary to witness the final transaction, basically notaries don't do conveyancing and they don't check legal titles. Often, the bank ends up basically doing that, playing piggy in the middle. We also have to arrange with the developer to stage payments because quite often people are buying off the plans, so the stage payments can be over 18 months and that's up to the bank and the developer to arrange.
Interview by
Michael Benjamin
