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Current state of the property market in Krakow


ash1972 3 | 88  
14 Nov 2008 /  #121
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?
SeanBM 35 | 5,808  
14 Nov 2008 /  #122
Property rentals in the larger cities are booming, 7-8% on residential property is easily achievable and 10% + on commercial is not unheard of and Im taking current property prices into considertaion.

I'm expecting around 4% on my 2 properties and I'm less than 50% leveraged.

Congrats on reasonable assmptions and leverage. But still people are buying and counting on 8-10% yields because "someone told them".

I agree with 6-8% on residential, can be as low as 5. (I won't do 4%)
10% for commercial is high but i think WB was saying "it is not unheard of" (it happens) it's a minority case and generally lower, about 6-8% again.

This is the current situation for people who have found good places in the centre of cities (Zone 1) if you bought years ago it is a totally different story.

I do agree with you nspablo when you say "someone told them", This is a full time job not Chinese whispers.
I have had people from Ireland fly over here for a weekend do viewings and buying three places out of the seven places they wanted to buy but I had talked them out of it.




I do not agree that Poland will go down the drain or that it will not be effected by the world crises, the truth is somewhere in between.

I personally think it is healthy for Poland to reassess lending and prices so that the same does not happen here as in other countries.




I read a lot about how people are going to be coming back from abroad in their droves but I do think it is unrealistic.

Until Polish people can earn as much here as they can in other countries, there is nothing to go back to.

We can again look at Ireland's history, when things went bad in other countries in the past.
Irish people still worked abroad, it was only when it became possible in Ireland for people to earn good money and opportunities were abundant did the population go up, 99% of my friends went back.

People are going to loose there jobs, many have already.
I think a lot of Polish people will continue to seek work abroad because it beats the alternative of coming back, let me rephrase the question, what do they have to come back to?.

Polish unemployment was 20% in 2003

And in certain areas 45%, it was unbelievable.
Poland has been successful the past 6 years and has a long way to go still.

If Poland can get the American multinationals over here it would be of tremendous value.
If/When Ireland is forced by the E.U. to come in to line with the rest of Europe for taxation.
I hope the Americans will come here.
Cheaper wages, property and a very high level of third level education.




Will Polish property prices in 2012 be higher or lower than they are now?

Higher but only if invested wisely.




In Ireland the charity soup kitchens and homeless shelters are bursting with Polish construction workers and trades men who have lost their jobs.

And sleeping in the tunnels in hyde park wrapped up in old cardboard.
I have seen it, I saw Irish people doing the same and I saw Polish people taking their place.
It is a terrible thing, it'd break your heart.
theblueenigma 3 | 188  
14 Nov 2008 /  #123
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

No that wasnt your point, and I never disputed that low corporation tax was a factor in our success. Everybody knows that Irelands success is down to low corporation tax, you are stating what everybody who reads a newspaper knows already. What Im curious about is that you also stated Irelands recent economic success wouldnt have been achieved to the same extent unless Ireland was in the EU, Im asking you why considering they have tried everything to raise our taxes and it was only when we stepped outside our EU box that we gained succes.

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.

Im not sure where I or anyone stated that the weakening Polish zloty was a result of Poland specifically ? You seem to be answering my questions with answers for different questions.

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.

That doesnt make sense. You said in a previous post that business contracts between germany and Poland had already been agreed, so there wasnt anything to worry about. Im not sure why you are correlating EU funding to a EU member state such as Poland to anything to do with the economic situation prevailing throughout the world, or indeed the impact of the worldwide recession on poland and its housing sector. I said germany and 'countries' and earlier discussed the importance of Americas outsourcing activities in poland.

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?

Im eating a burger now, so Im not so silly as to wrap my money around it :) Its impossible to predict what property prices in poland or anywhere else will be like in 4 yrs, thats absurd considering the present turmoil and contributory factors. Historically we can assume the market will fall, possibly bottom out, climb slowly and level out and get to a stage where they are realistic and relative to GDP, inflation and salaries etc. You seem very defensive of Polands economy and the housing sector. Im assuming it is either because you are very patriotic or you are refusing to accept anything but a positive and optimistic outlook because you have invested your money already in polish property. Either way, its nice :)

I do not agree that Poland will go down the drain or that it will not be effected by the world crises, the truth is somewhere in between.
I personally think it is healthy for Poland to reassess lending and prices so that the same does not happen here as in other countries.

I dont believe it will go down the drain either, and I think it is able to cushion current economic storms better than most. "the truth is somewhere in between" very true.

I read a lot about how people are going to be coming back from abroad in their droves but I do think it is unrealistic.
Until Polish people can earn as much here as they can in other countries, there is nothing to go back to.

I disagree as I think many will return, as they are doing already. They arent earning anything like they once did in Ireland and elsewhere. Construction workers who were earning E1000 a week in Ireland are now out of work, where can they go if not home ? I was at a wedding in krakow recently and was talking to a polish guy who had flew over from Ireland to attend. He is a plasterer in Ireland but will be returning to Poland in February as he says the construction industry in Ireland is completely finished. His gf was working in a hotel down there as a cleaner and is now unemployed unable to get work or social welfare so returned already to Poland. What else can they do but go home, and there are hundreds of thousands in the same situation.

We can again look at Ireland's history, when things went bad in other countries in the past.
Irish people still worked abroad, it was only when it became possible in Ireland for people to earn good money and opportunities were abundant did the population go up, 99% of my friends went back.
People are going to loose there jobs, many have already.
I think a lot of Polish people will continue to seek work abroad because it beats the alternative of coming back, let me rephrase the question, what do they have to come back to?.

Good point Sean

If/When Ireland is forced by the E.U. to come in to line with the rest of Europe for taxation.
I hope the Americans will come here.
Cheaper wages, property and a very high level of third level education.

They are already going, dell left here to relocate in Poland already and understandably so. I am very impressed with the level of education in Poland, krakow is a wonderful example with its wonderful universities everywhere. Education in Poland is seen as more of a privilage than a necessary burden which is refreshing. If the Poles on this website continue exagerating about salaries and cost of living, I suspect any prospective multi national scout will run to India instead lol guys keep it real ;)

And sleeping in the tunnels in hyde park wrapped up in old cardboard.
I have seen it, I saw Irish people doing the same and I saw Polish people taking their place.
It is a terrible thing, it'd break your heart.

Awful
boydie  
14 Nov 2008 /  #124
I'll put my money where my mouth is.

Prepared to bet one pair of tickets to a game in Warsaw's new stadium in 2012.

- average transaction price for a flat in Warsaw will be lower
- average transaction price for a flat in Krakow will be lower
- average prime rent per sqm for a mid range shopping centre (say Arkadia ?) will be lower.

Don't know about office space but think probably around the same level as it is currently.
ash1972 3 | 88  
14 Nov 2008 /  #125
No that wasnt your point, and I never disputed that low corporation tax was a factor in our success. Everybody knows that Irelands success is down to low corporation tax, you are stating what everybody who reads a newspaper knows already. What Im curious about is that you also stated Irelands recent economic success wouldnt have been achieved to the same extent unless Ireland was in the EU, Im asking you why considering they have tried everything to raise our taxes and it was only when we stepped outside our EU box that we gained succes.

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?

Im not sure where I or anyone stated that the weakening Polish zloty was a result of Poland specifically ? You seem to be answering my questions with answers for different questions

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.

That doesnt make sense. You said in a previous post that business contracts between germany and Poland had already been agreed, so there wasnt anything to worry about. Im not sure why you are correlating EU funding to a EU member state such as Poland to anything to do with the economic situation prevailing throughout the world, or indeed the impact of the worldwide recession on poland and its housing sector

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.
theblueenigma 3 | 188  
14 Nov 2008 /  #126
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?

Of course being part of a single currency is an advantage, but no more than any other country who has it. For many companies, being in a high risk, unstable country was unacceptable. They understandably wouldn't want to go to a country where inflation rates could rise to 12 and 15 percent, so of course a single currency is always attractive. That doesnt take from the fact that other than having the euro, the EU hasnt been of any advantage to Irelands recent economic boom and we were in Europe a long time before. Location, education, our historical relationship with America, our initative to create low corporate taxation, structures in place to attract foreign business, goverment grants, construction industry, infrastructure and at the time competitiveness were responsible for Irelands economic boom, not the EU :) It doesnt take anyone with an iq that reaches double digits to realise that EU membership had very little to do with our ten year boom, nevermind a genius. I dont have any problem, but I appreciate your concern :)

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.

Its ok, I get confused sometimes also, too much aspartamine usually does it :) Ill split what i think is confusing you into two.

a,"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." You stated the obvious then imagined I or someone else claimed Poland was the cause....nobody claimed that

b,"You've been telling me what a poor opinion the world markets have of Poland's economy due to the falling Zloty" yes, I have said it isnt an attractive thing economically to attract inward investment.

You see . . a & b, two entirely different points, just because other countries may thread cautiously if Polands currency free falls, it doesnt mean anybody thinks it is Polands fault :) Most of this thread concerns how the rest of the world and the credit crisis, recession, stock markets affects the zloty :) When a country imports goods, how does it pay for them? You got it, with its own currency. It supplies currency and demands product....wait. Not quite that simple. If you are a Chinese company, you want to be paid in yuan. So when a US company buys your goods, it needs to take its dollars, exchange them for yuan, and complete the purchase. So now you see, when a country imports goods, it supplies its currency and demands another. Exports are the reverse. There you have it, exports increase the value of a domestic currency, and imports decrease it. So when the rest of the world is in recession, and your neighbours hungary, germany etc are having problems, thus your currency will fall :) simple !

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.

Yes, germany is very big contributor to the EU as its largest economy, as are all the billions from the other countries in recession. Nobody here claimed that Germanys recession means that they will suddenly stop contributing to the EU, just as Ireland wont :) It doesnt seem relevant to the discussion.

Polands growth was driven in the last few years by a 6.3 percent rise in domestic demand as falling unemployment and rising wages encourage Poles to boost spending. This in turn has spurred a 15.7 percent jump in investments as local companies scrambled to expand their output, however this is all relatively short term and cant sustain itself through turbulent times such as these. While no economy is completely dependent on foreign investment and outsourcing it is a massive injection of monetary value to any economy, thus why Poland is so keen to copy Irelands blueprint.

I agree Poland does have a pretty good 'spine' for want of a better word, to support itself through these turbulent times, but it wont be enough to prevent a few ribs been broken :) Thanks mostly to Polish banks traditionaly being tight with money, is the reason they havent got into too much trouble. Although if this crisis hadnt happened Poland would have been a lot worse, unimaginably worse as they were going down the same road offering easy credit which would have had them borrowing from other banks and gambling more of peoples money on the markets. As you are looking at the long term you should be fine, but a lot arent in that situation and cant stick through it. If I could, I would buy up houses in ireland and elsewhere when they bottom out and leave them there for 15 yrs to reap the rewards . . . but I or few others can afford to do that so for most its about being able to afford a home, quality of lifestyle after debt and worrying about how much negative equity they are sitting in. Some guess prices will fall in Poland next year, and in 2110, then raise by 10% in the following two years . . but like everything else in housing, its all guesses by people who tell you what you want to hear :)

I'll put my money where my mouth is.

Prepared to bet one pair of tickets to a game in Warsaw's new stadium in 2012.

- average transaction price for a flat in Warsaw will be lower
- average transaction price for a flat in Krakow will be lower
- average prime rent per sqm for a mid range shopping centre (say Arkadia ?) will be lower.

Don't know about office space but think probably around the same level as it is currently.

Now there is a man that does put his money where his mouth is, but its a stupid man / woman that would take that bet :)
Deise 07 3 | 76  
17 Nov 2008 /  #127
Very interesting folks.

Just a point on the Irish angle. What I dont think any of you have addressed and, IMO, what really contributed to the Irish imaginary boom since 2001, was the setting of interest rates by the ECB at levels which suited Germany and France, countries which required low interest rates at the time. Ireland and Spain on the other hand both got practically free money shovelled into their economies at a time when they should really have been attempting to cool off. Without these low rates, as well as a lack of regulation in the lending market, the Irish boom since 2001 could not have happened.

The Irish economy which had been robust and competitive as well as growing steadily in the late 90s, subsequently turned into a debt based construction and service spin off junky where officially high growth rates masked an overdependence on the property monster. Its quite conceivable that we will experience a contraction of up to 5% next year and maybe 3/4% the year after due to our requirement to now wean the economy off construction and the associated spinoffs and start regaining a degree of competitiveness. Hard times ahead for many Im afraid.

As for Poland, based on the information which I can access (which wont be as accurate as what you lot have Im sure), I would fear for the property market, if not the real economy. It sems to me that Poland is very exposed to the FX markets at a very turbulent time, based on the proliferation of Swiss Franc mortgages people have taken on. The experiences of Iceland, Hungary and Ukraine dont augur well for non-euro aligned countries in such a situation. Hopefuly Im wrong.

Expect repatriated monies from the Uk and Ireland to decrease substantially also. There was a lot of money entering the Polish economy that manner. This money has now dried up and will leave a hole.

I think a lot depends on how indebted the average Pole is vis a vis his competitiors elsewhere. Irish people for example, are now the most indebted on earth. They are really 'fupped' for the forseeable future - perhaps a decade. The UK and the Yanks are in a similar position but American bankruptcy laws are softer and allow people walk away from debt easier. People who have not taken on massive debts will be able to ride this storm and hopefully emerge stronger at the other end in a couple of years because, make no mistake, the days of easy credit are gone forever. Back to old fashioned values - work and save and avoid debt like the plague. Im hoping Polish people are relatively debt free and as a result may actually benefit from this crisis in time. Still - a tough few years in store for everyone - and some more than others.
ash1972 3 | 88  
18 Nov 2008 /  #128
Now there is a man that does put his money where his mouth is, but its a stupid man / woman that would take that bet :)

Did you mean take the other side of that bet, or either side? :)
theblueenigma 3 | 188  
19 Nov 2008 /  #129
Ha, ha I meant the other side. . .although Im not a great gambler so I would take neither :))

Had'nt taken that into consideration Deise, good point !!

Hard times ahead for many Im afraid

I suspect a lot harder than most realise

It sems to me that Poland is very exposed to the FX markets at a very turbulent time, based on the proliferation of Swiss Franc mortgages people have taken on

Very true, I mentioned it briefly and the consequences are scary

make no mistake, the days of easy credit are gone forever

and thank God for that Deise, hopefuly the next generation will be saved from the mountains of debt this one incurred. Traditionaly the Irish and Poles were always savers not spenders, perhapsm those values will return also . . .well there wont be a choice I guess
ozdan 8 | 67  
19 Nov 2008 /  #130
polishmarket.com/next.php?id=66778

recent stats showing a couple of percent drop across pl
sueswalkies 2 | 32  
19 Feb 2009 /  #131
ok so i have 35% deposit how long do i have to be working in poland in other to get a mortage. Is the amount of money i can borrow based on how much i earn.
andy b 4 | 156  
26 Feb 2009 /  #132
A 35% deposit is a pretty good starting point. Of course, pretty much all mortgages will be dependent on how much you earn, offset against any ongoing liabilities you have - such as other mortgages, personal loans, credit card debts etc.

You don't necessarily need to be working in Poland to get a mortgage - we can still source mortgages for foreigners working in other countries who want to buy in Poland.
sueswalkies 2 | 32  
26 Feb 2009 /  #133
andy b GOLD MEMBER

Hi thanks andy, I am wanting to rent in karkow first to get a feel for the area,
paulinuk - | 12  
27 Feb 2009 /  #134
if you want krakow prices look on krn.pl
andy b 4 | 156  
27 Feb 2009 /  #135
Hi thanks andy, I am wanting to rent in karkow first to get a feel for the area,

So we can help you with a rental in Krakow, see our listings on .property-krakow.

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