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]


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]


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]

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]

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]


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 / Accommodation - Legal advice request [15]


But presumably you can just bribe someone?

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 / 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 / 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 / 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 / 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 / Putting pressure on developers to cut final installment on a development construction in Poland [17]

I have bought in Phase I of the Murano development by Budimex in central Warsaw. The date for the final 90% payment is May 2009, and my off plan purchase price in July 07 was 12 700 Pln/sqm.

Anyone else?

For those of you that are Property Secrets members, here is a link to the discussion I started:

propertysecrets.net/forum/budimex_murano_development_phase_i_in_central_warsaw/10360/35513.html

Real Estate / Putting pressure on developers to cut final installment on a development construction in Poland [17]

Harry, when you say high end central Warsaw prices have come down 20%, are you basing that on the 20 000 PLN/sqm or so prices that were being touted 15 months ago?

From what I understand 12 to 13 is still pretty much the norm for completed flats.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]

All fair, if not helpful, points Avalon. But:

a) "Honour" is a wonderful concept - I wish there was more of it in the world - but I really suggest you look up the word "business" in the dictionary.

b) The final agreed price was based on completion in May 2009, not Sep 2009. This delay is a new "feature" I wasn't aware of.

c) They would probably be trying to do the same to me had prices gone up 50%. See (a) above.

e) (Got something against the letter d? ;-)) Requesting that a contract be renegotiated is neither lying not cheating. They have the right to say no.

The fact that Budimex were prepared to take 90% at the end with only 10% upfront means we investors potentially have a lot of clout to use against them as they could be stuck with 90% of their cashflow missing and the apartments to sell all over again. Obviously it's not in my interests to see this happen, as I'd lose my 10%, so why don't BOTH parties try to (re)negotiate something sensible? Eh?

PS do you work for a developer? Budimex by any chance?

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]

Nicely put, Harry.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]


I totally agree, airlines and developers are as "honest" (ahem) as one another


So you define "honour" as putting yourself out of pocket rather than defending your own interests? Interesting. I'm simply suggesting that both parties could be reasonable so that neither one is stuck with too much of a loss.


No, just lots of clauses in their favour, surprise surprise! The key clause is that they get to keep my 10% if I don't complete. The question now is whether they would want this or not.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]

We could argue about morals endlessly. The fact is Budimex specified the 10/90 payment structure, not us. That would have put them in the perfect position to mess us around when the market hit the skies in 2009, as it was supposed to have done :)

Sean - when swimming with sharks it helps not to be totally toothless. Investors banding together helps to even the scales somewhat. One small private investor is NOT equal to one multibillion $ developer.

Avalon, I'm sure you've missed your true vocation as a priest somewhere along the line, but just remember, it's very easy and cheap to preach morality when it's not YOUR money on the line but someone else's. Maybe think about that, or look up the word hypocrite in a good English-Polish dictionary.


Two words, in fact: common sense

PS I'm not attributing any wrongdoing or dishonesty whatsoever to Budimex. It's just that other developers employing sharp tactics have given investors the idea that they can play the same game when the market looks different.

Thread attached on merging:
NEW: Budimex Murano development (central Warsaw) Phase I

I'm trying to get as many investors as possible to persuade the developer to renegotiate contracts to give us all significant discounts on the overall price, say 20%.

Not only have apartment prices fallen but Budimex are delaying completion until Spe 2009 - four months later than agreed.

The fact investors owe an outstanding 90% gives us massive leverage against the developer - it'll be really stuck if sales fall through.

POLITE REQUEST: Please only comment on this thread if you have useful and relevant information or indeed are a Murano investor. If you want to morally posture, there are other threads to do so. Thank you.

Real Estate / Putting pressure on developers to cut final installment on a development construction in Poland [17]


I haven't tried to sell so I don't know, to be honest. The majority of flats in the development were sold to locals.


Isn't it better not to forfeit the deposit and renegotiate the contract to make the purchase price 20% less? Doesn't that make more sense?


Well, that's a bit of an assumption! Not so desperate actually as I have no debt whatsoever. But, is anyone ever really *sure* what to do, given these volatile times? I'm exploring different options as any good businessman would. Threads are a useful way of doing that.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]

Budimex is owned by Ferrovial, the largest Spanish developer. They aren't doing too brilliantly.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]


Interesting point - that's certainly a possibility. My strong preference would be to renegotiate rather than just walk away.

If I were a developer stuck with unsold flats I would seriously consider it because it produces far better cashflow (but not paper profits) than just sitting on them. Then again Budimex may be awash with cash, who knows!

Real Estate / Putting pressure on developers to cut final installment on a development construction in Poland [17]

Ah, that was the other one - the first one I was talking about. That's still for sale. I haven't tried to sell the Budimex/Murano apartment, the one we're talking about here.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]

Sorry Sean. To be honest I don't know. They would insist on writing these contracts in Polish..

Seriously, I'll have a look, but I don't think the penalty clause (if there is one) will be my biggest bargaining chip - market conditions will.

Real Estate / Putting pressure on developers to cut final installment on a development construction in Poland [17]


What are you on about? One is for sale, but the ONE WE'RE TALKING ABOUT ON THIS THREAD isn't. I really can't make things any simpler than that.


That's not terribly logical. If you think somebody's not a good businessman then surely you should do business with him/her as you're likely to come off better in any deal you strike.

It's also somewhat odd that you think NOT exploring all your options is what makes one a better businessman. Then again, business culture does vary from country to country, and I don't have much experience of Poland.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]


I'm sure you were one of the nice ones! Thanks for the info Sean.

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]

Thanks Polanglik, that's pretty useful information. Would pulling out be the same as renegotiating from a credit rating perspective?

Also, surely there's a fair chance that the developer would actually WANT to renegotiate given that it's no longer "their" market?

Real Estate / Budimex Murano development (central Warsaw) Phase I [38]

Thanks kneehawk, that's very useful indeed. There's a chance that Budimex are simply in breach of contract as the agreement allows for only a 2 month delay and they seem to be 4 months behind.