Buying new buildings in Poland and price I was given

I have been in Wroclaw for a three days now and will be here for the week. I am only focusing on new builds as I don't have the time to look at second hand apartments.

The cheapest I have seen is PLN6500 per sqm2 and that includes developments that won't be ready until 2009 and some that are approx 8-10km from Rynek.

Not at all. The foreign investment is probably affecting Warsaw but nowhere else. I blame the Polish govt as the pricing is led by supply restrictions which are their fault.

I have 2 properties in Poland, bought in 2001 and 2 in Czech, but for me the value in Poland is now long gone, it costs up to 3 times more than Czech which is 25% richer and has a better stock of housing.

In Poland the rent to buy equation no longer makes sense (for instance you will be unable to rent 50sqm in suburban Wroclaw for more than 2000 zloty which means you need to rent it for 18 years to cover your capital, never mind interest, assuming you dont have to do any repairs or have any management costs).

The capital growth will also stop soon - the crack point will happen when deposits need to be say 70.000 or 80.000 zloty - that's beyond the reach even of the migrant workers, let alone locally based Poles.

You guys go ahead - its a free country, a market economy and every man for themselves, but I'm an accountant and I think you will catch a cold.

You guys will have to wait until it is possible to buy houses in the countryside. That is, when there are less restrictions. If you get in quick you'll make your money, but it will be a different type of investment. Renovation and resale.

Why are you guys buying and then renting flats to students, who have no money.

I would of thought that you'd be better off renting high class accomodation to companies.

Thats the answer Wroclaw, my company has been buying up big, and are presently just buying anything for sale. A recent study has shown that up to 8 million home owners will be forced to sell there house sale prior to 2010, due to high service fees, and lack of funds. We will take advantage of this situation.

Wroclaw are you interested in doing business with us, our main sponsors are Russian investors. We have already made millions of US$

I would love to be part of it, but it's beyond my limits. Thanks for asking though.

Interesting post Most.........

Some developers have told me that prices per sqm2 have doubled in a year which makes me nervous. AS you say the value is gone.

I'm not sure what is driving up the price.

1. Developers say materials - probably as you say because of lack of supply
2. labour costs/ wages - have they doubled for Polish workers in the last year - I doubt it!!
3. Speculation - will always drive up prices in any market place especially with foreign investors who are none the wiser
4. Greed from developers - is this a possibility? Being fed of course by the demand from investors.

Could there be a small downturn in the short term? Surely. The price inflation does not make sense. What is the average monthly wage in Polands cities? Maybe 6/700 euro? I'm guessing.

If materials supply increase and the speculation decreases will there be than a levelling of prices.

The situation is much more complicated than meets the eye. Of course, prices have increase dramatically over the last few years and this needs to be taken into consideration before making an investment. There is, however, another side to the coin.

A side which many ignore through lack of local experience.

Price inflation over a 15/20 year period is really not that great. I would imagine its much lower than in other countries and can be a key factor in reference to long term growth prospects.

How true, its only the foreign investors trying to make another sucker for there own greed. The average Pole cannot understand what is going on, how do you blame him if he takes home about 1500zl a month.

The quicker all those British/Irish real estate agents get out of Poland the better.

avg after tax income in wroclaw is about 480 euro.

what exactly is this new tax all about ?

Fiona,

I'd like to know more please.

Can you email me ? Click on my profile for my email address.


Good post Most however I feel the property market and stock market aren't always fuelled by logic.

House prices in the UK should have stopped rising a few years back based on logic. Young people on good wages simply can't afford to get on the property ladder.

Poland still has some way to go I believe. Logic dictates that Warsaw and Krakow should see a slow down in prices whether reality reflects that I do not know.

There is still a lot of value and upside to invest in Polish property.

Commercial property hasn't really been tapped into yet and there is scope for growth.

Land is still relatively cheap and offers strong long term gains for the small investor and stronger short term gains for the bigger investors.

It could be argued that the superstars of the Polish property market may be losing their shine there are still other towns that haven't shared in the success story. Towns in the tertiary market such as Gliwice, Katowice, Lublin etc

Spiritus I think what you say is very true (I enjoy reading your posts)
Additional points to be made is that real estate prices are going up in western countries is due to increases in pay by workers causing further demand in the property market. (this is not the case in Poland)

On the other side of the coin the banks are rubbing there hands knowing that the average home buyer will have to borrow money to buy a house etc. this means of course that poles will be at the mercy of the banks.

If there is a down turn in the economy people with big loans will just put there hands up in the air and just scream.

People living outside of Poland do not understand how difficult it is to survive on 1500/2000zl a month (if there lucky) let alone pay off a housing loan on this income.

The polish people may still be living in a honeymoon period embracing capitalism, lets see how long this will last.