Residential Property in Krakow 

There was evident boom in the residential property market in Krakow since the end of 2004 through 2007. Prices of new flats rose by more than seventy percent in 2006 alone. On the one hand, Poland’s accession to the European Union has persuaded foreigners to shop for apartments and/or houses in the city. On the other, the country’s concurrent economic upturn has induced a new surge in domestic demand for housing, fueled also by easy mortgage – courtesy of low inflation, fierce competition between banks, and until recently appreciating Polish currency (hence popularity of credit lines in Swiss francs). Since 2008 prices of flats have mostly remained stagnant in Krakow but they are certain to race upwards again sooner or later. 

Yields on residential property in Krakow hovers around ten percent and exceeds it for real estate in the city center.

Most prized are quality flats in the central Old Town historic district or at least those advantageously located close to it. Refurbished, more or less, apartments in old tenement buildings of the 19th and the 20th centuries or older outnumber modern condominiums whose prices start at an equivalent of 3,000 euro per sq. m for new flats in the proper city center. At the same time, several new fairly centrally situated apartment houses and housing estates are now in various stages of development here, some of them coming with spacious penthouse suites and promising true luxury for euro 4,000-plus per square meter. 

The middle of Krakow’s real-estate market for residential property consists of flats in the 20th-century downtown tenement houses, if in good repair, and apartments in housing estates constructed in various parts of the city in the last 25 years. 

Downmarket a prospective buyer finds apartment blocks of prefabricated concrete from the 1960s, the 1970s, and the 1980s, notably those in vast peripheral residential areas that resemble housing projects in the USA and similar developments in the Western Europe.

As regards new housing, developers provided some 6,600 newly completed flats in Krakow in 2006, around 7,000 new apartments in 2007, and 6,000 or so in 2008 – far short of the demand of 8,000 or so dwellings a year. No wonder the prices of new apartments rose on average by roughly 22.5 percent in 2005 and enormous 70 percent in 2006. By contrast, presently 3,000-plus completed flats await buyers, courtesy of flagging demand due mostly to tight mortgage regulations and overcautious banks. The greatest demand is for the least expensive new apartments, those in the price range from an equivalent of 900 euro to 1,100 euro per square meter and not bigger that 60 square meters. 

The bulk of new flats available on the Krakow property market come in housing estates that number more than fifty apartments, typically still in various stages of development. Their median price hovers around an equivalent of 1,800 euro per square meter but the brand-new dwellings are hardly ever the turnkey projects. 

Rentals for apartments in Krakow have risen, on average, by four percent over the last twelve months. Median rents amount to roughly 260 euros per month for a studio, about 350 euros monthly for a one bedroom flat, some 420 euros per month for a two-bedroom apartment, and about 590 euros for a three-bedroom one. A luxury flat in the central Old Town district may cost 2,000-plus euro a month. 

A detached house in a good neighborhood remains the most sought-after place of residence for the locals in Krakow, though many would settle for a semi-detached one as well. The cream of the crop are real estates situated among Krakow’s parklands in the western quarters of the city, notably in the Wola Justowska bucolic district. Also popular are inner suburbs to the south of Old Town central district. 

Despite the substantial housing density and protection due to its historic character, there are still plots available for development even in the most-cherished Old Town and its immediate environs, the recently chic Kazimierz district in that number, not to mention other downtown areas. Right now developers seem keen to take fuller advantage of it and the fact that the rich are ready to pay a considerable premium on high-quality apartments in the historic center of Krakow. 

To date conversion of old industrial premises into lofts hasn’t really caught on in Krakow. Yet it remains potentially a big deal as there are numerous abandoned factories and warehouses in its downtown, some of considerable architectural value and often situated truly advantageously. 

At the same time the Krakow citizens keep moving to the city’s inner and outer suburbs, the growing trend being reinforced by developers who take advantage of cheaper land and less red tape to build housing estates on the outskirts, sometimes beyond the city limits. As most of the migrants leave Krakow for the neighboring municipalities to commute daily to the city, the affluent often move further to the countryside in the Krakow region where grass is greener and larger estates more readily affordable.