The standard of living in Poland has been increasing over the years, improving the standard of our apartments and houses. What was once considered a luxury — an underground garage and a crystal mirror elevator — now includes a panoramic sea view, a residential park with a swimming pool, but above all, our well-being and integration with the environment. Thus, unique features that distinguish luxury projects while promoting sustainable development, health, and the digital world of their buyers, are becoming increasingly important.
Currently, the commercial success of properties in the premium segment is determined not only by their location and high-quality materials but also by the integration of lifestyle and well-being of future residents. As a result of this trend, super comfortable properties come equipped with features like eco-friendly design, advanced security systems, wellness facilities, or private spas.
It’s no longer just projects that fit into the two main streams of concepts from recent decades focused on the construction of intimate estates or high-rise skyscrapers. Instead, a series of developing innovative trends is gaining importance. This ranges from the “quiet luxury” concept, a growing demand for facilities in smaller centers and beyond, to the entry of millennials and generation Z into the game. These are radically changing the face of the high-end real estate world and forcing revolutionary modifications in approaches to future projects.
Changing Requirements
Along with the growing number of affluent people, the option of traveling and working remotely, and therefore also buying property abroad, technology development, and environmental awareness, buyer requirements and expectations are changing. For example, exclusive apartments and top-tier houses – apart from having an expensive address – used to be associated with ostentation. Today, the popular worldwide trend of “quiet luxury” dominates, focusing on thoughtful, mature, and timeless solutions.
People who buy luxury goods do not just acquire a product; they invest in a lifestyle, reputation, social status, unique experience, and a sense of belonging to a narrow group of people who can afford them. It is challenging to find such consumers by nature, so premium brand developers must respond to new aspirations and values that help to identify and acquire them.
Moreover, consumers consider sustainability an option for their lifestyle and a reflection of their values. Today, premium-class houses and apartments are standardly equipped with artificial intelligence-based protection, advanced home automation systems, and the Internet of Things integration. These innovations attract tech-savvy and future-thinking customers, enhancing their comfort, security, and overall offer value.
The big stakes in this game are the giant amounts of money involved as, despite geopolitical tensions and macroeconomic uncertainties, the global and local premium market continues to grow. The Polish luxury map is increasingly becoming home to exclusive addresses. It is a fact that the Polish luxury goods market, which has undergone a real metamorphosis over the last three decades, is thriving. According to the KPMG report, its total value increased in 2023 by 12.2% year on year, reaching PLN 42.4 billion.
The majority of premium market clients are the wealthiest people, businessmen, owners and CEOs of international companies, successful artists, athletes, actors, celebrities, lawyers, doctors, and politicians. The emergence of top-tier projects in the offer is usually linked with another stage of housing market development, local demand, and the attractiveness of a given location. Since the number of affluent and rich people is increasing in Poland, so is the number of potential buyers of luxury properties who consider them a sign of prestige and an investment.
At the end of 2023, the total wealth accumulated in Polish households amounted to PLN 3,072 billion, which means a 7% increase compared to the preceding year, and the net assets value increased by 10% year on year, reaching PLN 2,256 billion. According to the “Global Wealth Databook 2023” report, prepared for the period of 2022 by experts from the Credit Suisse Research Institute, the number of affluent people in several ranges is as follows:
- 441 thousand people earning over PLN 20,000 per month, with a total gross income of PLN 219.8 billion
- 83.6 thousand people earning over PLN 50,000 per month, with a total gross income of PLN 113.7 billion
- 35.4 thousand people earning over PLN 1 million per year, with a total gross income of PLN 79.5 billion
The Big Money Game
Premium property sale offers in January 2024 available on the Otodom website comprised 85% of desinger apartment buildings with penthouses of a unique architectural style, usually in prestigious locations, revitalized tenement houses with a view of famous monuments, intimate villa estates on the beaches, mansions with adjacent parks, modern residences by the lake, or boutique lofts with swimming pools and spas. Although luxury properties in every country have their characteristics and individual character, global trends can also be easily noticed everywhere.
According to the KPMG report “Luxury Goods Market in Poland: New Dimensions of Luxury”, despite an economic slowdown, the value of the premium and luxury real estate market in our country continues to grow. According to data from the Cenatorium company, a 9% increase in this segment was observed in 2022 compared to the previous year, and forecasts for 2023 suggest a further increase by 15% year on year, which translates into an amount of PLN 3.26 billion.
Although Warsaw remains the main center of the premium and luxury real estate market, the Tricity is also gaining significance in this field. According to a study conducted by ThinkCo experts in cooperation with Otodom in 15 polish cities, even without taking into account Sopot, associated with luxury, 27% of luxury apartment offers are concentrated in the Tricity. These data show that 85% of premium apartment offers for sale in January 2024 in the Otodom service came from Warsaw, Gdańsk, Wrocław, Kraków, and Gdynia.
In addition to that, the economic instability of recent years has increased interest in higher standard properties, seen as an effective way to protect capital. Poles are increasingly investing in such objects both in the country and abroad, with Spain leading the way. According to the Spanish Land Registry Office, in 2023 our compatriots bought 3,118 properties there.
However, in the analysis of this sector, demographic statistics are usually completely omitted, although they are an important factor influencing what types of real estate will be attractive in the future. It’s not difficult to notice the ongoing process of increasing the number of properties per capita for one successor. In 20 years, the wealth of the average family will increase to over PLN 860,000. The shrinking of Polish society will cause a wealth revolution in the next decade. The Poles will rapidly become wealthier, and the inheritances from our loved ones will be even three times bigger than today – results from a report prepared by Polityka Insight and BZ WBK. Increased wealth will bring about significant change in preferences regarding the better standard and location of houses and apartments of descendants.
According to the VM American analytical company report, the global value of the luxury real estate market in 2023 amounted to USD 1.5 trillion. It is forecasted that by the end of 2030, it will reach the value of USD 2.8 trillion, with an average annual growth rate of 6.5% in the 2024-2030 forecast period. In fact, in Poland, the premium segment is still at a relatively early stage of development and, compared to Western Europe, has a relatively low price level and still a small number of truly luxurious projects. At the same time, its constant and dynamic growth has been observed for many years. According to some forecasts, in 2024 it exceeded PLN 4 billion. The demand for luxury residential properties in our country is growing, and there are still not many good premium offers available on the market, hence the market has excellent development prospects ahead.
Author: Adam Bialas is an economic expert, real estate and premium market specialist, manager at “Bialas Consulting & Solutions” agency, and business journalist.
Source: https://managerplus.pl/wzrost-zamoznosci-polakow-napedza-popyt-na-nieruchomosci-premium-18621
