/ Prices of apartments in Krakow are collapsing further down in 2010-2011
polsky = Michaelas = Tadeusz2007 = Popw = clarituslux
and now Special-Polak, (all the same person) you should learn to vary the way you structure your sentences." House Price Bubbles on the Major Polish Housing Markets "
The article you quote is quite interesting, but, as usual, the devil is in the detail, which you do not seem to understand. Even the authours of this article, admit that it is very difficult to compare the Polish property market to any other as it has not been in existence that long. So, in other words, they are guessing."You will understand everything" ;)
As you put such "great store" in this article, you must realise how the contents disprove the rubbish you have written in previous posts under all the different alias's that you use.
You have quoted developers profits in Krakow at 600-1200%, yet table 14 (although this refers to Warsaw, I assume Krakow is similar) in this article shows a maximum profit of 100%. You have also stated in a previous post that the developers cost per m2 is around 300 PLN, the same table 14 shows the developers cost at 5000 PLN m2 inc. land, VAT etc, so by stating that a new flat/house should cost a maximum of 200,000 PLN, this will buy you 40m2 with no profit for the developer? No one has disputed the fact that apartments have been built, purely for the rich and foreign clients who were/are willing to pay over the top prices, that is their choice.
The article was written to cover the period from 2004 until March of this year, since, which, unlike the rest of the EU, Poland has not been in a recession (the only EU member to remain in Poistive GDP) and the banks have always been strict with their lending criteria and thus have not sustained the predicted huge losses as per the article and none of the major developers have gone bankrupt either.
I will refer you to the last 3 paragraphs of the article you quote:-
"Another factor of the analysis is the assessment of future trends in the housing market. In the optimistic variant, developers have over 60% of projects sold which will enable them to spread sales and profit realization over the period of 2-3 years and wait for fundamental demand to drive sales of the existing housing stock. Prices will fall by 10% and, combined with inflationary depreciation, will slightly boost demand. Speculative investors will rent flats, or, if they are in a good financial condition, they will wait through the difficult period. A considerable decline in investment outlays will take 2-3 years.
In the pessimistic variant, bad economic condition of property developers and investors,
combined with further fall in demand as a result of deteriorating general economic situation will lead to devastating competition in the housing market. As a result, prices will see a deep fall, at least by 30%. Such large house sales will, however, lead to a strong recovery in demand, and the market will regain its balance within a year.
A fall in investment outlays will take 1-1.5 years.
The in-between variant assuming a price fall of 15-20%, a gradual recovery in demand and the market regaining its balance within 1.5-2 years, seems the most likely. Investment outlays are likely to be expected. Such a variant would lead to the worsening in housing portfolio quality, albeit without a significant impact on the banking sector stability. Also the resulting decline in GDP would not be significant".
As per my previous posts regarding this thread, I agree that there will be a correction in prices on existing properties but there will not be a massive crash in prices. There will however be a shortage of new properties on the market as developers will keep new projects in abeyance until such time as the market improves.
If you are going to continue to post inane drival on PF, then at least learn about the subject first.