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Poland staking an investment case? - 3 March 2010

While the main economic powers in Europe continue to struggle their way out of recession, one of the original ‘emerging markets’ for overseas property has just reported positive GDP growth for the last three months of 2009. Poland, the largest economy in the eastern ‘wing’ of the EU, is the only economy in the 27-state bloc to have avoided recession in the past 12 months.

Recently-released figures show that in the final quarter of 2009, Poland’s GDP grew by 3.1 per cent year-on-year, above expert forecasts. Previously released statistics show that Poland’s economy grew by 1.7 per cent across the whole of 2009. As a result of the figures, the European Commission has revised Poland’s economic forecast for 2010 to a 2.6 per cent expansion, up from the 1.8 per cent predicted in November.

Poland was one of the brightest stars of the overseas property boom, supported by mortgages readily available in Swiss Francs and an abundance of new property that was in high demand from professional classes working for multinational corporations. In Warsaw and Poland’s second-tier cities, investors flocked to off-plan projects. Those same investors must have been nervous for the safety of their cash as the emerging markets one by one suffered steep declines in their property fortunes – however, the recent economic news means that they may be able to relax a little more in the future.

Just as the British mid-market press laments the poor economic performance of the UK that has seen hundreds of thousands of Polish workers heading back home to work, so the Polish economy has shown continued growth.

Overseas property analysts continue to preach caution in the market, most citing that a full-scale recovery is still some way off. However, this news will come as a relief to those who invested in Polish property in the past decade and were wondering if their investment would perform at all. In a sure sign that the property market in Poland is yet to be considered a significant new investment opportunity, marketing of new projects is minimal and there is no hype in the industry, however, should GDP growth continue to outperform Poland’s more illustrious European neighbours, it is only a matter of time before the second wave of emerging market investment will be promoted.

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