Real Estate / People who bought in Katowice Oak teraces phase I and phase II [102]

Wait, wait, wait.. one last question! I'm curious to know what motivated you all to invest in a third tier city like Katowice.

I can't say Katowice was a place I'd actually heard of. What was the economic rationale? A big new Nokia factory? Projected inward migration? What?

Real Estate / People who bought in Katowice Oak teraces phase I and phase II [102]

WB, this is interesting - I didn't know you were in the fit out business. Do you deal with high end Warsaw developments?

I bought my flats through WarsawProperties.pl and they provide a (presumably luxury) fit out service at 1500 Pnl/sqm.

1500 PLN/sq m sounds a little steep by any standards. Let's face it it's cheaper in London at the moment. The standard line, of course, is that if you spend any less you'll get substandard results and not be able to rent the place out to discerning, wealthy tenants - DISASTER! ;-)

I'm basically just interested in maximising my profits, not creating a masterpiece of interior decoration.

Real Estate / High end city-centre apartments in Warsaw and Krakow [5]

Good idea if you're a bookie - unfortunately I'm not. Anyway, I can understand the joy of finally getting another Irish boy (O'Bama) into the White House - it's been some time :)

Real Estate / High end city-centre apartments in Warsaw and Krakow [5]

No, I need to sell my first property (of which I own 90%) to pay for the second (of which I've only paid the 10% deposit). The alternative is to take out a mortgage. I'm considering both options at the moment but I'm leaning towards not having to get a mortgage.

I was hoping for PLN/sqm valuations for specific (named) high end developments - I assume you don't have these to hand?

The bet's still on. But we're talking about 2012 :)

Paddy Power stylee?

Real Estate / Current state of the property market in Krakow [135]


Did you mean take the other side of that bet, or either side? :)

Real Estate / Accommodation - Legal advice request [15]


But presumably you can just bribe someone?

Real Estate / Current state of the property market in Krakow [135]


Yes, the EU told you on numerous occasions that you were being very, very naughty indeed by having such an unfairly low CT rate! I'm sure that had you all quaking :) It really doesn't take a genius to realise that the European HQ of an American or Japanese company is going to be in a country that actually has the Euro. From then on, it's logical to pick the one with the lowest taxes. You - quite cleverly and correctly in my opinion - got the best of both worlds. What exactly is your problem with this?


Now I'm just confused. You've been telling me what a poor opinion the world markets have of Poland's economy due to the falling Zloty.


What I meant was that 1) Germany is a big contributor to the EU 2) The EU has promised to spend money in Poland and won't reneg just because Germany is in recession. Outsourcing doesn't come into it. All I said about outsourcing is that Poland's economy is too domestically driven to be that dependent on it.

Yes, I do own (high end) off plan property, have made a fair bit on one and am probably flat on the other. Maybe their values will drop a little in the coming year. I've got no problem with that as I'm thinking long term. The point I've been trying to make all along is that Poland has no inherent STRUCTURAL weaknesses (such as a collapsed credit market). Almost anywhere else in the world is in worse shape.

Real Estate / Current state of the property market in Krakow [135]

Blue Enigma, the point is that Ireland managed to get the best of both worlds by both being inside the EU *and* later on adopting an incongruously low corporation tax rate. The combination of 1) Being in the Eurozone 2) Having far and away the lowest CT rate in the Eurozone was what proved a winner with global corporations.

As regards the PLN, it has long term, strengthened enormously since Poland entered the EU. Indeed the original motivation behind the pro-Euro political drive was that an overly strong Zloty would hamper Polands' exports. The weakening PLN at the moment is caused ENTIRELY by a global capital flight to the USD due to problems in the whole emerging markets sector, not Poland specifically.

Germany is a huge donor to the EU. What the EU will invest in Poland has been pre agreed. No, Germany doesn't have pre arranged outsourcing contracts with Poland. Germany isn't so big on outsourcing anyway compared with Britain or the US.

You still haven't put your money where your mouth is; so, I ask again: Will Polish property prices in 2012 be higher or lower than they are now?

Real Estate / Current state of the property market in Krakow [135]

Lwowska, is this the first time Polish companies have made people redundant? I don't think so. The long term trend is clear:

indexmundi.com/poland/unemployment_rate.html

Obviously, Poland is going to have higher unemployment in 2009 than 2008. It's not never never land.


People who can get low offers accepted by the developers, that's who.

It all depends when you bought and at what price! I'm expecting around 4% on my 2 properties and I'm less than 50% leveraged.

Real Estate / Current state of the property market in Krakow [135]


The exact opposite is true. British employers prefer East Europeans as they have more of a work ethic and deliver much better value for money. Employers don't pay them less; they just get better results for the same outlay.

Three cheers for free labour. And sucks to socialism.

Real Estate / Current state of the property market in Krakow [135]


Tell me, would Ireland have achieved all of this had it been OUTSIDE the EU? Probably not. The point is, once inside, Ireland's super low corporation tax rate made it an obvious location for foreign companies' European HQs. Poland is following a similar (though not identical) route with big personal tax cuts from Jan 2009.

Polish economic growth is not dependent on winning outsourcing contracts from the US. In fact the only thing wrong with Poland's economy is what's wrong with the rest of the world. The extent to which Poland really is insulated from this will be tested over the next 2 years.

The growth of Poland's major cities is driven by inward migration. Migrants returning home is a detail. And besides, they'll probably make sure they have a job in Poland first before giving up that waitressing/cleaning/nannying gig in London..

My previous question wasn't rhetorical: Do you think Polish property prices in 2012 will be higher or lower than they are now?

Real Estate / Current state of the property market in Krakow [135]


Err.. what does an exchange rate - a market price - have to do with fundamentals? Fundamental statistics are calculated from data outside the market, such as umemployment, GDP growth or FDI.


No argument there. I just don't think Germany is much of an investment in terms of real estate.


High end flats in central London are unaffordable for 99% of Brits, mortgage or not. True, they're falling in price now. Why? Because the investment banks that paid big bonuses for so long are now broke. My approach is, and always has been, to concentrate on the properties that the top couple of % would be interested in. Their wealth is more robust - but by no means unassailable. Yes, richer Poles losing their jobs would cause serious problems. My guess is that the poorer ones will lose theirs first thanks to decisions made by the richer ones :-)

Real Estate / Current state of the property market in Krakow [135]

What will be a factor is the quality of the property you have bought. Prices will be resilient for upper end developments as the target market was never the mortgage desperados but rather those who already had large deposits and good salaries.

Let's not forget that Ireland now has a problem with recession and unemployment. Its EU funded growth spurt is ancient history.

Real Estate / Current state of the property market in Krakow [135]

Hi Ozdan,

The point is that long term both China and Poland are going to be way ahead of where they are now. Investors are simply panicking at the moment.

Poland is a strong market as real estate purchases are 90% domestically driven. What might stall plans along the way is the issue of unemployment - that will be the killer as that will physically prevent people from buying the properties they want to live in, investment choices aside.

Yes the point about Berlin was that yields are great simply because Germany is a non home owning culture. Yield and capital growth markets are different kettles of fish.

Real Estate / Current state of the property market in Krakow [135]

That sounds a little high. I thought it was around 5%.

At least the EU thinks things look OK for Poland:

gospodarka.gazeta.pl/gospodarka/1,54641,5902201,An_island_of_relative_calm.html

Real Estate / Current state of the property market in Krakow [135]

Boydie

So what if the Zloty has fallen 20%? You're forgetting it has spent the last 4 years appreciating some 80%. This retracement will aid competitiveness.

Germany may be entering recession but her spending commitments in Poland (through the EU) are signed and sealed.

Rental yields? The fattest and juciest are, as ever, in Berlin. Try buying there and see how well your capital grows.

If you think you can double your money now in the Polish property market, yes, you've made a mistake. If you think your Polish portfolio will outperform property anywhere else AND be relatively stable, you're pretty much correct. It's definitely a long term play now. Where do you think prices will be in 2012? Higher or lower than now?

The only 'mistake' is to be in property at all AT THE MOMENT, that is, anywhere in the world. Getting out of a very strong market that temporarily has the jitters makes no sense.

Real Estate / Current state of the property market in Krakow [135]

What are the GDP figures you've got? BTW this is interesting:

gospodarka.gazeta.pl/gospodarka/1,54642,5881063,EC_expects_3_8_ percent_GDP_growth_for_Poland_in_2009.html

Real Estate / Current state of the property market in Krakow [135]

Is Polish unemployment increasing? No, it's still decreasing, and growth is both positive and strong. Just because Britain and America are about to enter a recession triggered by a banking liquidity crisis, it doesn't mean Poland is.

Can you point to any weakness whatsoever in Poland's fundamentals? Furthermore, its economic growth is almost entirely domestically driven (for the time being).

Luckily most Polish developments are NOT bought by British investors.

Real Estate / Current state of the property market in Krakow [135]

Deise, during the peak phase of booms rental yields tend to be particularly low as everyone is struggling to buy as quickly as possible and rents only as a last resort. When prices stabilise or retrace a little, rents have a chance to catch up.

Real Estate / Current state of the property market in Krakow [135]

The simple fact is 'affordability' is a total non concept. Property in Germany is priced way below what people can really afford because no one gives a damn for home ownership there and transaction taxes are enormous.

What causes a crash is a fairly sudden change in people's ability to pay a mortgage. For example, unemployment, or as we're seeing in the West, a credit squeeze.

Polish banks becoming more cautious in their lending policy and weeding out the no hopers does not constitute a credit squeeze. Other than that - can you see 4% growth turning into -1% any time soon? With Poland's largely domestic economic growth and EU spending signed and sealed?

Guys - if you made your money from 2000-2005 then true, you've got nothing to worry about. But people don't stop needing places to live in just because the boom is over!

Real Estate / Current state of the property market in Krakow [135]


Try Argentina. Now THAT will be value for money!

Real Estate / Is it now the time to buy a flat in Warsaw? [10]

Yes. To be precise it depends on the terms of the contract. Normally for 10/90 repayment structures you cannot sell early unless you settle in full first or pay a penalty. For schemes where you make regular payments - for example 15%, 20%, 30%, 30%, 5% you can generally flip at any time (after the first payment).

But my feeling was you'd always achieve the best price after completion. As you said earlier, there are no hard and fast rules.

Real Estate / Is it now the time to buy a flat in Warsaw? [10]

Actually I own 2 (off plan) flats in Warsaw, the first 90% paid for, the second with 90% owing. I was toying with the idea of selling the first one (while still offplan) to pay the balance on the second - which would remove any need for a mortgage.

Although frankly I wouldn't mind holding onto both long term. The return will be decent but not fantastic.

Real Estate / Current state of the property market in Krakow [135]


If you've bought in a good location and development then prices should hold well. Poles are getting fussier about what they buy but I don't think they have any less to spend

Real Estate / Current state of the property market in Krakow [135]

Boydie, you need to get some kind of grip on reality. 35% down? That's what's predicted for the UK over 2 years, based on a total breakdown of trust among banks due to subprime toxic waste.

Polish banks neither need or want to stop lending. There will be some legislation from 1st Jan 09 restricting large multiple/no deposit/foreign ccy lending but this will hardly affect the middle to upper middle classes who will buy the better properties.

There's no country in the world where the smartest city centre apartments are anywhere near affordable for the average citizen. Poland is no exception.

Polish salaries continue to go up (GDP growth is > 4%) and the cities are growing larger. Exactly what is going to tip Poland over the edge?

Real Estate / Is it now the time to buy a flat in Warsaw? [10]

How much longer would you say, Poznan Kasia?

Real Estate / Current state of the property market in Krakow [135]

Is Lithuania in the same position as Latvia and Estonia, i.e. prices falling rapidly? I know Vilnius very well, but not for property (I used to have a girlfriend who lived there!).

Real Estate / Current state of the property market in Krakow [135]

So the Irish have the last laugh! It often happens :)

Yes I pretty much agree with what you say. Warsaw essentially lagged behind Krakow for a couple of years and then really took off. I missed the really fat growth but I believe got some fairly decent dregs. Both have similar dynamics and Poland seems to be almost a twin capital country. It looks like Warsaw will ultimately dominate but it seems job creation is roughly equal in both cities at the moment - possibly with a slight bias towards Warsaw.

The Warsaw ghetto was I'm sure pretty historic before 1945 but like most of the rest of the city was totally flattened in the war! That's really the point, whereas Krakow is beautiful, Warsaw is very modern (ugly if you're being unkind) and the centre looks and feels somewhat like a Manhattan wannabe. Still, it's the capital, and for that reason alone foreign companies will want their headquarters there.

The ghetto area / Grzybowska St is growing into the new banking and financial district. Looks like the growth may need to take a breather at the present moment! :)