The property market In the last five years, the property market in Poland has experienced something of a boom. Low entry levels attracted a lot of foreign investors, resulting in price increases of 33% in some areas in 2006. A strong economy, and a young well-educated workforce, has also attracted many major employers to Poland, particularly the IT and electronics industry. A combination of undersupply in homes, strong tourism and a stable economy is attracting investors, particularly to the main cities.

Rental/resale market Traditionally, young Polish people tended to live with the extended family but with an ever-improving economy the demand for modern rental accommodation has increased dramatically. The rental market in Warsaw is particularly strong, with 50% of the population aged under 35. The resale market is also thriving, with many young Poles who have worked abroad returning to buy homes of their own. On the tourist front, there is strong demand for accommodation in old city apartments which have been refurbished.

"Krakow is one of the hottest places for rentals because of the strong all-year-round tourism and with yields of between 5%-6% you can't go wrong, " says Noreen Hynes of Aquarius Property.

And while rents in Warsaw and Krakow are strong because of the all-year round tourist industry and corporate lettings, there is a good local rental market in Lodz, with one-bed apartments renting for about 400 per month and two-beds for 500, according to BG Property Consultants.

However rental income is subject to income tax at standard rates (19%, 30%, 40% dependent on income).

The buying process Purchasing property in Poland is pretty straightforward, although as with all locations, make sure you have good legal advice. New homes in Poland are subject to VAT at 7%, while there is a 2% acquisition tax on secondhand properties.

Allow an extra 10% of the purchase price for taxes, registration fees, legal fees and the agents' commission.

Non-nationals must apply to the Polish Home Office for a permit before purchasing property. It's not difficult to get a permit but it may take some time. If you need to make a quick purchase, you can get round this by setting up a Polish company. Property which is re-sold within the first five years of purchase is also subject to 10% tax, unless the money is reinvested in another property.

Where to invest According to Noreen Hynes, Warsaw and Krakow are both mature markets with very good rentals but prices here are no longer cheap. "Prices in Warsaw are now creeping towards Irish levels, with property in the city selling for between 2,500 and 3,000 per sq m. But buyers looking for a bargain should maybe look at Lodz, an industrial city with a very good local rental market." Hynes also suggests Wroclaw as an up-andcoming city, which, along with Lodz, is served by Ryanair.

Linda Gorman of BG Property Consultants agrees that Lodz is tipped as the next place where investors should see some strong capital appreciation.

"Already Gillette, Siemens and Bosch are in Lodz, and Dell are due to open a big manufacturing plant there later this year and will be bringing about 3,000 Irish workers over to get started, all of whom will need accommodation, " says Gorman, explaining that prices here have shot up since early this year. "In February you could have bought a two-bed apartment in Lodz for around 90,000 and now that same unit would cost around 125,000."

What to expect for your money Expect to pay from about 120,000 for a studio in an upmarket suburb of Warsaw and up to about 450,000 for a fourbed unit. A studio in Krakow centre will set you back from 105,000, while a nice two-bed near the city centre will cost between 185,000 and 200,000. In up-and-coming Lodz, you can get a new one-bed apartment for 96,000. Two-beds in Wroclaw start at around 101,000.

What the experts say According to the estate agents, Polish property still has plenty of room for capital appreciation (currently averaging from 17% to 20%) and, according to Linda Gorman of BG Property Consultants, since Eddie Hobbs said Poland was a good investment spot for Irish buyers they have seen a lot of interest. Noreen Hynes also points out that the market is not entirely dependent on foreign investors, with increasing numbers of Poles also eager to buy their own residential and investment homes.

What we say Poland certainly seems like a good buy but if you're investing here, make sure you visit and see what you're getting for your money. Remember if you are renting out any property, it needs to be near to shops, transport, businesses and international airports.

About Poland

Capital: Wa rsaw
Currency: Zloty (PLN) 1 = 3.91 PLN approx
Climate: Temperate, continental humid. Summer 150C to 240C (often reaching 300C). Winter . . .50C to 00C. Yearly rainfall average is 680mm.
Holiday season: All year round tourism. Popular for city breaks in Warsaw and Krakow.
Reasons to go: Both Ryanair and Aer Lingus operate lowcost flights to several cities in Poland. The country has a mix of beautiful rural landscapes and historic cities full of interesting architecture.

Useful contacts

Aquarius Property: 01278 2900
Astute Property International: 01-610 4542 BG
Property Consultants: 01-667 5855
Buyside Property: 01-219 0252
Christies Estates: 01-667 0099
Polcorp Developments: 01-473 1315; info@hollybrook. ie
Specialist European Properties: 091-516 9000
Star Property Park Apartments, Wroclaw Price: One-beds from 94,778; two-beds from 101,100; three-beds from 184,448.
Where: Just 3km from the main square in Wroclaw city centre.
What you get: Modern apartment overlooking Wroclaw's most famous park and incorporating a shopping plaza and office accommodation.
The big sell: Wroclaw, Poland's greenest city, has several big universities and is home to big employers including Toyota, Geant, Carrefour, Tesco, Cussons, Volvo and Ikea, resulting in a strong rental market.
Agent: Aquarius Property 01-2782900.