Magazine article Journal of Property Management

Condominiums in Poland: A Transitioning Housing Market Creates Challenges and Opportunities

Magazine article Journal of Property Management

Condominiums in Poland: A Transitioning Housing Market Creates Challenges and Opportunities

Article excerpt

It has been 23 years since the collapse of the Soviet Union and the other communist regimes in Eastern Europe, marking Poland's movement from state-controlled communism toward market capitalism. With the change to a free market economy, housing stock moved from government owned and managed real estate toward private ownership. In 1994, the Polish parliament set up the Act on Concerning Ownership of Premises, which created the first condominiums on January 1, 1995.

THE ACT ON CONCERNING OWNERSHIP OF PREMISES

Historically, apartment buildings were owned by the municipal governments or government-owned corporations. The residents were renters paying rents usually based upon the size of the unit rather than location or other market value influence.

After the Act on Concerning Ownership of Premises was passed, local governments and companies opted to sell their rental units to tenants at a substantial discount--50 to 90 percent of the market value and as a result, upwards of 90 percent of residents opted to buy their units. As of 2012, 95 percent of owners who purchased these units still live in them and do not rent them out. The units that were not sold under the privatization programs are retained by the government or corporations, and they continue to be rented out.

Since 1995, there has been a continual shift in housing in Poland. In 2001, there were 11.95 million housing units in Poland (including condominium, apartment and single-family housing). By 2009, the number had gone up to 13.3 million housing units--an 11.29-percent increase through new development. Additionally, during the same time period, the number of people who owned condominium units rose by 188.8 percent--from 688,000 to 1,987,000--as a result of privatization and through a growing market sales sector.

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CHALLENGES WITH FIRST-TIME OWNERS

The effect of these discount. prices on real estate has been that many first-time owners do not initially associate owning a unit with paying maintenance, insurance and tax fees every month. It is quite common to see a number of condominiums--in addition to external and common areas--in bad condition New owners are not used to or da not understand why paying fees for the upkeep and repair to these buildings is their responsibility--possibly because in communist days they were required to pay nothing.

OWNERS OPT FOR SELF MANAGEMENT

As of 2009, there were approximately 16,000 licensed property managers in Poland--about 10,000 of whom were actively working. …

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