New build or secondary market, a complete comparison for those who want to buy an apartment in Kraków
New build or secondary market, a complete comparison for those who want to buy an apartment in Kraków
The question of whether it is better to buy an apartment from a developer or on the secondary market accompanies practically every person planning a property purchase. Both options have their supporters, both approaches have their reasoning. In Kraków, as one of the largest Polish residential markets, the supply is so wide that good offers can be found in both categories. Let us look at this dilemma from the perspective of concrete arguments and typical situations.
Let us start with the strengths of the new build market. First, modernity. Apartments built in recent years have significantly better thermal and acoustic insulation, use newer ventilation systems often with heat recovery, and benefit from modern heat sources such as heat pumps, underfloor heating and district heating networks. This translates into lower bills and a higher energy class of the building. Second, warranty. The developer bears responsibility for hidden defects of the building for up to 5 years, and in some aspects even longer. If a problem appears with the installation, roof or foundation, you can claim your rights. Third, the ability to influence the layout. Many developers offer the option of changing room divisions, the location of walls, electrical and plumbing installations during the construction stage. This is a rarity on the secondary market. Fourth, no need for renovation. An apartment received from the developer can be fully finished according to your own preferences, without inheriting someone else’s finishing decisions. Fifth, payment schedule spread over time, which is attractive especially in combination with a mortgage.
The new build market also has weaknesses. The first is time. From the moment of buying an apartment under construction to receiving the keys, several months to two years often pass. This is a long period during which the life situation may change. The second is the risk of surprises. Delays in construction, changes in finishing costs, documentation problems, no real possibility to see the apartment before handover. The third is location. Most new investments arise in developing districts, sometimes peripheral, where infrastructure is only being created. The fourth is price. Developers have less room for negotiation than private individuals, and the final price per square meter in the new build segment is often higher than on the secondary market at a similar standard.
Let us move on to the secondary market. The strengths are above all readiness. The apartment exists, can be fully viewed, real conditions, neighborhood, noise, sunlight can be assessed. One can also move in practically right after the notarial deed is signed, which for many people is decisive. The second advantage is a mature location with ready infrastructure. Shops, schools, clinics, parks, transport, everything is already working. The third is more room for price negotiation. Private sellers are usually more flexible than developers. The fourth is the atmosphere of existing buildings. Old Kraków tenement houses, buildings from the 60s to 80s, modern estates from the 2000s have their character that new buildings only acquire over time.
The weaknesses of the secondary market are also clear. The first is technical condition. Older buildings may require renovation of installations, insulation, window replacement. The second is lower energy class and higher maintenance costs. The third is no warranty. Every hidden technical problem becomes your problem from the day of signing the notarial deed. The fourth is limited possibilities for changes. It is harder to change the layout of rooms, the layout of installations or the size of windows in an existing apartment.
In terms of prices in Kraków the situation today looks as follows. The new build market in popular districts such as Bronowice, Ruczaj, Czyżyny or Mistrzejowice starts from around 13 to 16 thousand zlotys per square meter in the standard segment. In prestigious locations such as Stare Miasto, Salwator, Kazimierz, prices exceed 25 to 30 thousand per square meter. The secondary market has a much wider range, from around 10 to 12 thousand per square meter in older buildings in districts such as classical Nowa Huta, Mistrzejowice or Bieńczyce, to similar premium levels as the new build market in the best locations. The average transaction price in Kraków currently amounts to around 14 to 17 thousand zlotys per square meter, with significant variation between districts.
In terms of investment for rental several aspects are worth considering. The new build market offers energy efficient apartments, easy to maintain, attractive to tenants looking for comfort. On the other hand, the price per square meter is higher, which lowers the profitability of rental. The secondary market in proven locations often offers better profitability because the purchase price is lower and the demand for rental is stable. In the short term rental segment, location matters most, and here the secondary market in Stare Miasto, Kazimierz or Stradom is often irreplaceable.
In terms of legal risk the new build market provides greater safety because the developer goes through the process of obtaining permits, and the land and mortgage register is fresh and clean. The secondary market requires greater care in legal verification, but a trusted agency and a good lawyer can quickly identify any risks.
How then to decide? First, assess your life situation. If you have to move in quickly, the secondary market has an advantage. If you have time, the new build market may make sense. Second, assess the total budget, meaning the price plus the cost of finishing in the case of the new build market or the cost of possible renovation in the case of the secondary market. Third, think about the district. If you care about the strict center or districts with established identity, the secondary market is often the only sensible choice. If you are considering new, dynamically developing areas, the new build market will give a wider choice. Fourth, pay attention to the investment perspective, meaning how the apartment will behave in value over 5 to 10 years.
At Eternel we serve clients on both sides of the market. We work with developers and we have access to offers on the secondary market, including many beyond the public market. To our clients we offer an honest comparison of both options in the context of their specific situation, budget and plans for the future. The decision we make together is to be informed and dictated by facts, not by fashion or slogans.