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The Krakow property market, like the city of Krakow itself, is continually evolving and the pace of change over the past decade has been particularly quick.
The 'noughties' have seen the arrival in Krakow of third-generation shopping centres such as Galeria Kazimierz on the fringe of the Jewish quarter, Galeria Krakowska next to Krakow Glowny train station and Bonarka City Center to the south of the Stare Pogdorze district. Traditional high street retail in the pedestrianised Old Town on streets such as Florianska, Grodzka and Szewska has obviously been weakened as a side-effect of this phenomenon whilst office tenants, the likes of whom would traditionally have graced stylish tenement houses around Rynek Glowny, have also upped anchor from the dead centre and shifted into purpose-built business parks such as Quattro Business Park and Bonarka for Business (B4B) which offer easier access, larger floorplates and greater flexibility than the historic buildings of the Old Town.
Local operators such as the Likus family have successfully built a chain of boutique hotels, namely the Copernicus, the Stary and Pod Roza, to fill this gap left in the Old Town, whilst international hotel chains such as Sheraton and Radisson have set up shop in or near the centre adeptly catering to both the booming tourist market and the burgeoning business traffic. Cracovians have been given their own chance to buy apartments in such central locations thanks to the birth of a residential development market and a greater availability and affordability on the personal mortgage market. The last 10 years has seen an explosion in the residential sector with buyers able to choose between high-end, city centre schemes such as Browar Lubicz or Angel Plaza and even river view schemes such as Wislane Tarasy or Nadwislanska 11.
The Krakow residential market has grown beyond all recognition over the past decade. Double-digit interest rates around the year 2000 quickly dropped (and have stayed) at a level at which individual homeowners have sensibly been able to borrow. The availability of relatively cheap borrowed money together with the deteriorating condition of existing housing stock prompted Poles and foreign investors to invest quickly in the fledgling housing market either for their own use or as investment. The lack of supply coupled with this incredible demand forced prices to spike from 2005 to 2007 before dropping back to reality in the years following the onset of the credit crunch. As of 2014 prices have bottomed out at a level at which local buyers can easily afford to buy leading to a healthy and liquid market.
Krakow has made a name for itself in the past decade as a centre for Business Product Outsourcing (BPO). Tholons recently ranked Krakow as the number one outsourcing destination in Europe (overtaking Dublin) and one of the top ten cities worldwide along with more household names such as Bangalore, Manila and Mumbai. It is the outsourcing industry which is really the driving force behind the growth of the Krakow office market which is close to reaching 750,000 sq m of space. Whilst there is no clearly defined office district in Krakow there are a few clusters emerging (e.g. on Opolska street to the North and around Wadowicka street to the South) and the growing market trend is for developers to create business parks (in several phases) to allow for the growth of tenants over time.
The rise in prominence of online retail is changing the shape of shopping worldwide and Krakow is no exception. Modern consumers can shop at the touch of the button these days at home without having to leave the comfort of their armchair. There is still a place for flagship stores – e.g. Zara's impressive new outlet on Rynek Glowny – but the majority of new fashion stores are to be found away from this high street in newly-planned shopping centres in locations easily accessible by public transport and private cars. Apart from pure shopping, increasingly these centres have to provide all-round entertainment to improve on the online experience hence the improved offer of cafes, restaurants and organised events and leisure activities.
Krakow is a city which can truly pride itself on its balance of business and pleasure. International hotel chains often point to a perfect storm of weekend tourist clients and weekday business clients helping to maintain incredibly high levels of occupancy. Aside from boutique hotels aimed squarely at those looking to pamper themselves on a long weekend to the capital of Malopolska, typical international chains such as Starwood, Radisson, Hilton and Accor have also made Krakow their home. The current expansion of Krakow airport, the opening of Krakow Arena and Krakow Congress Centre (ICE) will surely further drive the development of international hotel brands in the city with French group B&B, Motel One, Marriott and Hilton all interested to tap further into the Krakow hotel market.
Whilst Krakow has its fair share of successful shopping centres, yet more large retail schemes are planned or in the early stages of construction serving districts poorly catered for by existing stock. The office market continues to boom along with the outpouring business and the hotel market will surely also re-start its expansion in line with the expected increase in business and tourism numbers. Krakow, along with Warsaw, are the only major cities in Poland showing positive population growth and coupled with the natural desire of Poles to own their own, new property the rate of development and investment is likely to keep pace.
Krakow is in many ways a classic 'MittelEuropa' city. Poised at a crossroads between the East and the West, the former Polish capital is one of the great historic cities of Europe. Less dainty than Prague and less grandiose than Budapest, Cracow has a beauty of its own, at times serene, at times fantastical.
Although the city has a population of 750,000, the city centre is of a manageable size, and you can generally walk to wherever you want to go, be it the beguiling Ancient Jewish district of Kazimierz, or the hilltop hideaway of Salwator. The city is also serviced by a reliable bus and tram system if you need to make a swift journey from A to B.
In terms of convenience, Krakow can now boast a blend of characterful modern shops, as well as delightful farmers' markets with excellent regional produce. In the Old Town, swish international labels rub shoulders with intriguing home-grown ventures.
As far as the bar and cafe scene goes - many visitors concur that Krakow already outclasses many of its Western European peers, despite the fact that there was hardly anything at all 15 years ago. The restaurant scene is improving by the month, poor on Oriental and Indian, but impressive on European and International cuisine. Prices remain reasonable for Westerners in almost all spheres.
As the cultural capital of Poland, Krakow is not short on things to do. There are always intriguing exhibitions opening up, whilst the permanent collections of the museums are treasures in themselves. The city's many beautiful churches, often packed during mass, double as enchanting venues for concerts.
We are affiliated to Prestige Property Group, one of Europe's largest internet real estate agencies, and also to Cracow Life - the city's leading internet guide for visitors. These partnerships give us both the international experience and the local know-how to handle your property search effectively and professionally. We look forward to being of service.
Leach & Lang offer a professional yet approachable service and are able to advise on all aspects of the Krakow property market. Leach & Lang's strong grounding in the residential market - whether related to sales, letting or property management - also extends to the commercial market where the team have experience in advisory, acquisition, disposal, leasing and asset management.
About Krakow Property
Krakow Property aims to provide an authoritative and transparent guide to the local property market for individuals and companies curious about Krakow real estate. As well as providing up-to-date information on current trends and values, we intend to provide specific advice and assistance as how to approach any prospective purchase or lease.
How expensive is it to buy an apartment in Krakow?
Residential property is priced 'per square metre' of useable space and prices vary greatly depending on location. Most properties fit in the 4,000 – 10,000 PLN per sq m price range and typical apartment sizes are from 30 sq m (typically a studio) to 100 sq m (with several bedrooms). It could therefore be said that a typical 50 sq m 1-bed apartment in a popular residential area not too far from the centre might cost in the region of 350,000 PLN (approx 80,000 EUR).
What does it cost to rent a house or apartment in Krakow?
House and apartment rents vary greatly depending on the size and quality of the accommodation. Large houses in desirable suburbs such as Wola Justowska can cost as much as 10,000 PLN per month (approx 2,500 EUR) but this is certainly considered top-end. Small studio flats in reasonable condition but further out from the city centre can be rented for as little as 1,000 PLN per month (approx 250 EUR).
Which is the best area in which to rent or buy an apartment or house?
This very much depends on you. With a few exceptions almost everywhere in Krakow can be safe and pleasant to live and can be more or less suitable for a variety of prospective buyers or tenants. The city centre is often most popular with people moving to Krakow for the first time as they get to grips with the city but it is also one of the most expensive areas to live in. Families might prefer to be located further out where there are more parks and green spaces or houses available for rent or sale with gardens.
What are typical office rents in A-class buildings in Krakow?
Renting space in an A-class office is likely to end up costing circa 14 EUR per sq m per month (almost always office rents are denonimated in EUR rather than in PLN) and landlords expect tenants to sign up for relatively long contracts (5 years +) but usually give incentives such as rent-free periods and/or contributions to the fit-out of the office space.
What are typical retail rents in Krakow?
The boom in new shopping centres in Krakow over the past decade has created a large supply of retail facilities outside Krakow city centre. This has impacted on high street rents where basement spaces rent now from 40 PLN (10 EUR) per sq m per month. Ground floor units on prime streets are typically in the range of 150 – 200 PLN per sq m (40 – 50 EUR) but rents can be higher or lower depending on the quality, visibility and size of the space. Shopping centre rents roughly cover the same rent scale with large anchor tenants on long leases able to negotiate low rents whilst smaller boutique operations have to pay handsome rents to the shopping centre developers and investors.