Real estate in poland - how an average Pole can afford such prices?

Can some one explain to me how an average pole on say 1000 zl a month can afford to purchase real estate at prices in excess of 300,000 zl, are overseas buyers short changed when buying in poland

An average Pole can't afford to purchase real estate. But for some reasons there are many rich people in Poland; some of them make money abroad and come back to buy property; others were lucky to own land that is worth a lot of money now.

But personally I think buying a property overseas isn't a very good idea -- it would be a great idea if a man lived at least 150 years. But now - buying and waiting for at least 10-20 years to make sure the property has a good value to sell - is a waste of time.

wujek thanks for your reply, I take issue with your comment that the average wage in poland is 2400zl.....what utter rubbish............more like 1200zl, the big fish are earning more ripping off polish people....taking out a loan .....sure.....how much ? what interest rates?.............not forgetting the high cost of living............sorry get your facts right. lef

I don't agree with your comments, poland by world standards is a poor country, with little commercial natural resources, I beg to differ about what the average person in poland earns, from my understanding most poles live from pay packet to pay packet with little left over, the prices of all products continue to rise, it becomes a impossible situation for the average pole to borrow big money from some swiss bank, I can only warn poles to be very carefull, as when the economic situation gets worse, those people who borrowed will loose all. I can only stress that the current prices of home is by far too high and when thinks settle down the prices will be reduced by half. ( I read that Moscow is the most expensive place to live- what a joke)

:)In reply to wujek, I would like to say "get your hand off it" and relax, because if one asks a question dosn't mean he is anti polish, You should be the first person to be aware of the difficult conditions facing day to day living in poland, Poles have unforfortunately a complex when it comes to being criticized and if fact are jealous if somebody has more than themselves (this is the product of the communist system).. my original question was a fair question to ask and your reply is that of a business man. Your smart arse and insulting comments towards Australia does you no good, please do not forget that Australia was always loyal and supportive of the Polish people in its struggle against communism and gave a lot of financial aid.

The poles are a great people and can be proud of their heritage, I belieive the tempo of the current move to a capitalist system is not good for the average pole. The new generation young pole who sets himself in this way of life ie money money money, will have destroyed everything good that has been given to him by his forefathers.

Let me assure you that there is plenty of soap and water in Australia as there are good people who want justice and a good way of life for the polish people

I'm quite amazed at how a relatively simple question has been reacted to by such vitriol and hate.

The question was simple (and valid) how can someone earning 1200zl p/m take out a loan for 300,000 zl? A lending institution would never allow someone to borrow that much when earning so little. And yet in Warsaw/Krakow and other major towns in Poland the house prices are pushing up to those prices.

The answer seems to be the property is either inherited or people go aborad to earn the money to put down a sizeable deposit or buy the property outright. Nothing wrong with that, 70% of my Polish family are doing exactly that here in the UK.

It was interesting to read the average wages as posted above. Does anyone have a true figure for an average wage. I'm tempted to believe that 2400 p/m is a true figure when you average out the earnings acros the whole of Poland population, not forgetting away from the towns and into the countryside earnings are a lot less (especially in south east Poland).

Oh and Wujek, this isn't a criticism, so please don't back and attempt to level me with insults (i'm too big and ugly to worry about insults), 'peasants' is a derogatory word, akin to an insult. So to refer to people of your own country as 'peasants' shows tremendous lack of respect and lack of culture.

Without turning to insults can you explain why? Perhaps you can give me reasons why you disagree. I'm all for changing my opinion because of a reasoned argument on your part.

The question asked was how can someone afford to take out a loan of 300k when earning the national average wage (in another forum believed to be circa 2k p/m) to buy property.

No lending institution, here in the UK or Poland would take that kind of risk.

To your information - BPH - which is only one medium size bank in Poland, during the first six months of 2006 had issued mortgages worth c.a. 2 billion PLN.


The bank takes very little risk here. If someone has a stable earning of 2400 PLN brutto, as well as a clear creadit history, then there`s no problem with issuing him a mortgage for 100.000 PLN.

According to the Główny Urząd Statystyczny (The Main Statistic Office) the national average polish wage in the second quarter of 2006 was 2427,27 zł.

gospodarka.gazeta.pl/gospodarka/1,33181,3538816.html

And regarding the loan, it seems that a family of four, with a monthly income of 2500 zł netto can take a loan of 215 000 zł in Bank Pocztowy ( percentage is 6,20% ).

A single person, earning 3500 zł netto can take a loan of 375 015 zł in BOŚ ( 5,38%).

In both cases the loan is to be paid in 20 years.

My source : tutej.pl/cms.php?i=13822

PS: Many people in Poland instead of buying a house, build it themselves. That way they don't have to take that big loan at once.

Thanks Wujek and Matyasz, I've now got a better understanding on how the banks work in Poland.

Just as a point of interest, in terms of getting a mortgage in the UK, most banks will only lend you 3.5 times what your salary is. If you're living in London earning 30k then you'll be able to borrow 105k. Given that a flat that isn't a sh1t hole in London is going to be at least 175k you can see the problem.

Where I was going with the question is that if the same rules apply in Poland (which clearly they dont) if someone is earning 3k zl how would it be possible to afford a property in the ever increasing prices of the property market in Krakow/Warsaw/other major towns? If you wish to live centrally, building isn't going to be an option so a mortgage or a massive amount of money would seem to be the only way.

Anyway, cheers for the answers.

mmmmm,,,, well what can I say mmmm.... perhaps wujek would do the honorable thing and apologize for making such horrible allegations... lets see what a man wujek is?


Without going in circles, what can a person buy for 215000zl, and what is he repaying per month... thats the question wujek cannot understand, he also stated bank loans was in the high 3's, the above post claims it is 6.20%.

It was mentioned on our polish radio, that banks are now only allowing loans of only 50% of equity because they understand property prices are inflated..

I'm sure banks in every country take into account a clients earning capacity, expenditures, and value of property before given out loans.. (always remember banks never loose money)

Hmmmm... no. The fact that you`d got lucky this time dosn`t mean that you`re going to get lucky next time :)


Hmmmm... an appartment.. a house in the country side...


From few hundred to few thousand PLN per month ..dependant on the loan..


You can get a credit for as much as 1.50% per month.. everything depends on the courrency.. the bank.. and the loan..


In some banks you can get a mortgage of 110% value of the real estate.


Yeah, but it seems you don`t have any idea how it works.

Most loans in overseas countries are around 6%, if you can get me a life long loan at 1.5% for say 300,000 zl I will bare my bum in Bourke street, (I will bare my bum in ......... street)

I would love to have a second opinion from poles living in poland, sorry wujek but your all over the place.

Well, a single person with a monthly income of 3500 zł netto can take a loan of 314 500 zł in Swiss franks in GE Money Bank, and the percentage then will be 3,05%.

My source: tutej.pl

Well, we had a credit for 1,49% per a couple of weeks ago, but now the situation changed a little bit and we `re only offering credits from +2%.

GE Money Bank on the other hand seems to be still offering credits rates beginning from 1,65% for morgages in Swiss Franks till the end of this month.

direct.money.pl/gebm

Hi Wujek,

It seems pretty clear to me you work in the industry. I was hoping I could pick your brains.

I'm going to need a mortgage for a property in Krakow. I can make a 20% deposit on a property of about 300 k zl. My main problem is this:

I've got no history in Poland work, tax or otherwise - can I still get a mortgage based on the fact I'll be on a 9/12 month contract.

If the answer to that is no (which all the reading I've done seems to suggest)
Is there a better chance in years time when I recieve another contract for the same time frame?

Many thanks in advance.

Wujek,

Since you are in banking, what do you think about starting a payday loan type business in Poland? Payday loan business makes short term, small amount, high interest, no collateral loans.

There would be no problem if:

- as a foraign citizen you`d have a permanent, continous stay in Poland - and a continous income. The way you`re saying - the bank has no way of telling if you`re going to have another contract next year and if you`re going to work/live here in 2 or 3 years. If you`re a foreign citizen the bank would also have problems in finding you abroad as well as executing its rights on your property. So the bank has no real guarantee that it`s going to have any long term profit from giving you the mortgage and the bank dosn`t need any problems. So - as I see it even if in some time you`d have a third contract - this wouldn`t change anything.

- you`d be a Polish citizen.

There`s a LOT of such enterprises here (there was a time when they were - very - popular, but right now I don`t think it`s this way) - you`d run into steep competition, and if you don`t know the realities of the market its likely you`d run into some kind of troubble.

Thanks Wujek, :)

Cheers Wujek,

Looks like I'll ahve to do some thinking about setting myself up as a business to prove a regular income or marrying the missus!

This would be a really good idea.

simon_porter00

Just remember, if you want be happy for the rest of your life, make an ugly woman your wife. :)

wujek,

May I ask you a question.Little stupid one. I think about buying property in Krakow- maybe next year.I will buy it by cash no mortgages- How do people pay now?

I mean buyer and owner must sign ovnership deed at notary and buyer must pay money to seller. How do they do it the same time to be safe?

Do I need the lawyer to do it for me?

FIRST - you shouldn`t buy a real estate directly from the previous owner - cose this issue is quite tricky - and I don`t know if you realize that, but i.e. it`s possible to sell one real estate to many people at the same time becaouse the ownership has to be changed in KW, and the previous owner might "forget" to do that and sell the property to 2 or 3 people during one day..

SECOND - you don`t need a lawyer - a lawyer is needed only when something goes wrong. What you need to do is to use the services of a real estate agent who will guide you thru the whole procces. ..So first you should find a real estate you want to buy i.e. here:

krn.pl/szukaj_nieruchomosci.php?reg=6&param=1_2_1_Krak%F3w_ _0_____0_____________0&cw=&ct=1&show=0&offset=0_1_1_0

You see that there is a real estate angent attatched to each property - and this is how it should be, cose its - legal and safe.

No, you don`t need a lawyer - you`d need a lawyer only if something goes wrong.

There is also a point where you`re going to have to sign an agreement in the preasance of a notary.

I see your point but would it not be cheaper buying direct from the owner as you would be avoiding the 3% commission or agents fees. Using a solicitor would avoid double ownership

Only a real estate agent is properly qualified to deal with real estates and only he can guarantee that someone who`s buying a property isn`t going to be scammed. A solicitor can only give some legal advice that might be usefull or not.

Do real estate agents carry insurance, in case they do make a costly financial mistake?
How can a real estate agent guarantee that a real estate buyer will not get scammed?

Yes

(Ustawa o gospodarce nieruchomościami. Dz.U.00.46.543 - Art. 181)


Becaouse they have to check everything according to their corporate standards - which is a 500 pages thick book which states everything they should to to do their job properly. He also has an insourence from all damage he can caouse due his work.

...

Ofcourse you can do everything without even an solicitor

Perhaps you don`t realize about that but the basic thing that a solicitor does when asked for a legal advice is to activate a system called LEX on his laptop, read the text he found in that system to his client gving a few sentences from himself - and charge for this job 100-200 PLN per advice. You should know that LEX can be easily hacked and used for free by anyone on any computer (I actually know a guy who does that).

You can go to a lawyer - but lets say that the lawyer is not specialized in real estate law..
So he`s going to read you what he`s going to see in his laptop - which is i.e. that you don`t have to change the entery in KW when you`re buying a property, which is said very clear in the proper article - too bad that it creates an opportunity for the seller to sell the real estate to various buyers..

Everything can be done cheaper if you know how to do it, but if you`re not sure what you`re doing you may screw things up.

You see that there is a real estate angent attatched to each property - and this is how it should be, cose its - legal and safe.

No, you don`t need a lawyer - you`d need a lawyer only if something goes wrong.

There is also a point where you`re going to have to sign an agreement in the preasance of a notary. [/b]

I know little about it - I bought my first flat about 10 years ago( sold now) and bought directly from private people I checked -ksiegi wieczyste- and they gave me all last paid bills.

I know there are lots cheaters But I can;t assume that everyone wants to tricvk me.
people who sold flat were in their 50 livoing there for about 15 years.

I knwo that everyhing is changing in Poland. I asked about lawyer as in England he is doinh everyhing for people - Like estate agent in Poland.

I can see that in England Estate Agents don't do much at all they just took over proplerty market and charge people.

But in Poland- As you said they will do all checks for me. Do they organise preparing notary agreement? How much do they charge for service ( mor less?) Do I have to pay money to their account first?

They do everything what you`re going to agree in a written agreement.


It depends on the contract, but usually it`s 2-3% of the transaction. Sometimes - much less freqently it`s 0, cose only the seller is paying the agent/real estate makler to make the transaction.


No. First you sign an agreement where you agree how the transaction is going to look like.

poland has silly rules regarding real estate.

In oz land if you have no conscience you become a real estate salesman.. I carn't understand that in poland real estate agents can act on on behalf of the seller and the purchaser (what about conflict of interest)????

The real estate agent/makler has to strictly respect the law and the rules set by the corporation otherwise he`s going to loose his license and he`s not going to perform the job he lernt and invested his money (only the application for an exam for a real estate makler, that is being passed by some 30% of the applicants and ends in reciving a license costs c.a. 5000 PLN). So he has to make everybody happy.