Real Estate /
15 reasons why the Polish real estate market will crash soon [258]
Prices dropped, in some cases, by as much as 50%.
Source: propertyarticles.com/overseas/20091012438.html
High demand in the real estate market in recent years had caused systematic price increases in both residential and commercial investment sites - until mid-2008.
The accumulation of sites which appeared in the market in 2008; the change of economic conditions and slow-down in the real estate market brought both a decrease in demand and prices. Depending on plot type and location prices dropped, in some cases, by as much as 50%.
The market is now characterised by a high prevalence of supply over demand. In recent years the supply of investment sites was small and the situation became worse after the cancelling of the majority of zoning plans. This limited supply of plots ready for investments, coupled with prosperity in the real estate market caused rapid price growth.
The dynamic development of the property sector in Poland encouraged companies acting in different branches, as well as foreign developers, into the Polish development sector. This occurred regardless of the cost of purchasing very expensive sites. In a result of financial crisis which emerged in the second half of 2008 and drop of demand and prices in real estate market, many of these firms are now saddled with land assets which threaten their financial liquidity.
