«Foreigners are not allowed to buy houses and plots of land», — more and more often you can hear in conversations among expats. «It’s almost impossible to buy a house, you better choose apartments», — some realtors repeat. REALTING journalist decided to ask the market expert Galina Kharlamova, whether this is true, and at the same time to talk about the state of the real estate market in Warsaw now.

«There are investors who bought housing at the beginning of the year, and have already won»

The Warsaw real estate market has revived after a slowdown: demand is growing, which of course affects the cost of a square meter. The 2% mortgage on the first home, which will start working in a week, only spurred the whole process. Realtor and market expert Galina Kharlamova believes that the most far-sighted investors had time to seize the opportunity and buy real estate earlier this year. Even though it’s still possible to find good options, in some time it will become harder to do. And no, foreigners are not rejected while buying houses and land, only those who have filed the documents in the wrong way.

— Tell us just in two words: How is it going in the real estate market in Warsaw now?

— Just six months ago in the real estate market in Poland (and, in particular, Warsaw), we observed some silence. Because of the high interest rates on mortgages, most buyers have lost the opportunity to purchase their own homes, which, of course, resulted in a decrease in demand. That is why developers began offering apartments at the beginning of the year in a 10/90 payment system, when 10% of the cost of real estate had to be paid immediately, and 90% — after the commissioning of the house. In February, this system adjusted to 20/80, and already in March, this opportunity simply disappeared. And those who had time to invest funds in such a program, were the winners as the prices of new buildings have risen since then.

In May and June, we have already seen a very active movement in the real estate market as demand has returned, and prices have gone up again. The main reason for this revival is the famous 2% mortgage law on the first home, which comes into effect in just a week — from July 1. The real estate market immediately responded to such innovations: higher prices, increased demand, and generally growing investor interest. Investors understand that prices will continue to rise, and now they are actively buying real estate at more affordable prices.

As for this mortgage at 2%, there are many nuances (up to the fact that it will not be a «pure» 2% after all), about which there is enough information in public sources. But there is good news: because the creditworthiness will be counted from a smaller monthly payment, the customers’ ability to pay practically doubles. That is, there are more chances to get a loan with a low monthly income. However, there is «bad» news, which has become an obstacle for most of my clients: the size of the mortgage for one person cannot exceed 500,000 PLN (for two people — 600,000 PLN), and the amount of the down payment — 200,000 PLN. This means that the value of the property cannot exceed 700,000 to 800,000 PLN. At the same time, it is almost impossible to buy a good two- or three-bedroom apartment in Warsaw with this money. As a result, this mortgage will most often be used either by Poles who are used to small apartments, or those who buy the first house for their children, and there are not many such buyers among my clients.

— Now let’s go back to permits for foreigners to buy real estate. How often do buyers choose properties that require permits?

— There are quite a lot of buyers who are used to living in a detached house because they value their comfort and are willing to invest and wait for it. For such buyers, it is absolutely normal to wait for the right house for 6 months or a year, and they easily get into gathering all the necessary documents. But here, of course, you need to be confident in your realtor and lawyer, because constantly bringing documents to the Ministry means increasing the consideration of their application each time by 2-3 months. Because the addition of documents before the application completely nullifies the application review period, and you have to wait 3 months again. Plus another month for this permit to take effect.

The fastest we can get a permit is 4 months from the date of application.

Permission of the Ministry of the Interior of Poland to Buy Property: Everything a Foreigner Needs to Know

— It is said that foreigners are increasingly being rejected for this opportunity. Is this true?

— These are rumors. As I said before, in order to get a permit from the Ministry, you need to find a good lawyer who will competently advise you on the necessary documents. Among my acquaintances, there were foreigners who were denied such a permit, but it was not because of nationality, but simply because the documents were not gathered correctly. For example, the Ministry always checks the connection of the applicant with Poland and whether such a purchase is not contrary to the interests of the country (the law «On purchase of the real estate by foreigners» dated March 24, 1920). The second circumstance is excluded because Warsaw and its surroundings do not belong to the border areas. But in the paragraph about the connection with Poland appears quite a lot of misinterpretations. Here you do not need to look for Polish roots — it is enough to provide a residence permit, on which you live in Poland for six months. The residence card itself is proof of connection with Poland. But if the applicant does not provide a residence permit, as a rule, he is denied to buy a house or a plot of land.

Poland’s legislation is designed to help the individual. For each application, the Ministry has to prove that it did everything possible for the person to buy the house. In my practice, there was a case where the applicant’s residence permit expired during the application process, and then the Ministry suspended consideration of the application for the period of obtaining a new residence permit. I mean, they did not deny permission for the purchase but simply postponed the process. When the client provided a residence card six months later, the Ministry issued the permit.

In general, you need to understand that transactions with permission from the Ministry are the longest and most fascinating transactions in the work of the realtor. Especially if they are complicated by getting a loan. The term of work with such clients can stretch up to 8 months (the record was a year and a half from the start of work). But this does not mean that it is impossible to get permission from the Ministry, both sides of the transaction have to meet all the conditions and have patience.