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23/11/2020

3 differences between the Spanish and Polish real estate markets

3 differences between the Spanish and Polish real estate markets
When I consider the similarities and differences between the real estate markets in Poland and Spain, I see a lot of similarities that make our clients very often (and sometimes rightly) transfer their experiences on the Polish market to the Spanish market. However, such transfers are not always appropriate. In this text, I will show you some significant differences between both markets.

Difference No 1: The holiday apartment sector

The holiday apartment market in Spain is an important sector of the economy and a significant injection of foreign capital. This market is largely occupied by foreigners. Yes, the Spaniards also buy the so-called "segunda residencia", or "second apartments", but the main recipients of the otherwise huge production of local development companies are foreigners. This group includes mainly Europeans, Americans from both Americas and the Chinese - although their interest are rather large cities such as Madrid or Barcelona and investments in commercial real estate.

In Poland, the holiday apartment sector does not exist in principle. Yes, many housing projects are built on the Polish coast and in the mountains, but the buyers of these apartments are mainly Poles. This is mainly due to the difference in the climates of both countries, but also the different mentalities of both nations.

Difference No 2: Spanish developers versus Polish developers

Despite the fact, that the development market in Poland is over 30 years old, Spanish large development companies are still more professional and have incomparably greater capital resources. It was clearly visible several years ago, when several development giants from the Iberian Peninsula appeared in Poland. Fadesa, Realia, Sando - these names signed large projects in the largest Polish cities. Then, the exceptionally deep crisis in Spain forced these well-doing in Poland subsidiaries to save their ailing parent companies, and for some of them it ended in bankruptcy.

However, many companies survived, restructured and returned to the market when buyers - including foreign buyers - began to return to the game. Today, we have several very strong development groups in the local market: Neinor, Aedas, Metrovacesa, Grupo TM, Sando, Via Celere, Sacyr, to name just a few. To realize how big are the discrepancies in the sales results of these companies compared to the results of Polish developers, let's take Sacyr and Robyg, probably the largest real estate development company in Poland at the moment. Robyg's sales revenues for 2019 amounted to PLN 1,115,187,000, while Sacyr's revenues in the same period amounted to EUR 4,169,467,000.

The differences between the Spanish and Polish development markets are also noticeable from the point of view of the end customer. Take, for example, the level of finishing of an apartment or house received from a developer in Poland and Spain. 

The level of finishing in Poland

In Poland you get your keys of your new apartment and immediately start a renovation, because it is simply impossible to live in such a newly acquired apartment. There are no floors, interior doors, bathrooms or kitchens. Of course, I am aware that in Poland, turnkey apartments are delivered more and more often, but the vast majority of them still go to their new owners in the above described condition.

The level of finishing in Spain

It is completely different in Spain. The apartment picked up by the new owner is "turnkey" finished, that means it has finished floors, kitchens and bathrooms, fitted internal doors and built-in wardrobes. Usually, a customer buying an apartment off plan can personalize it within the framework specified by the developer, for example by choosing the color of the bathroom tiles, the type of floor or the color of kitchen furniture. Such personalization is of course possible only up to a certain stage of construction, customers buying finished apartments must be satisfied with a set of finishes selected by the developer's interior architects.

Difference No 3: Payment for the property

Finally, one more difference, a minor one, yet quite surprising for foreign buyers of real estate in Spain. In Poland, when buying real estate, we usually pay for it by bank transfer, other forms of payment are rarely accepted.

In Spain, however, there is still a system of banker's checks issued by the buyer's bank - Spanish, of course, because opening an account is a must when buying real estate. The buyer transfers the money to his account in advance, contacts the bank, stating the date of signing the notarial agreement and the amounts to be on the checks, and then goes to the bank on the set day to collect the checks. At the notary's office, after signing the contract, he exchanges for the keys to his new Spanish home.

By focusing on the property purchase process in Spain, we will find other elements differentiating the Polish and Spanish markets, and it is known that "the devil is in the details". Therefore, before making a purchase decision, it is worth contacting a proven real estate agency, which, thanks to its experience, will guide you through the entire purchase process without stress.

I would like to thank Michał Kubicki, an expert with 25 years of experience on the Polish real estate market, for his help in collecting data for the text.

Photo from https://unsplash.com/@jdent