Real Estate hits a new low in Poland

For those who have purchased real estate in Poland the following may not be good news.

wbj.pl/article-43971-property-prices-hit-rock-bottom.html?typ=wbj

True. And should go down at least 15% more.

Please advise how you have come to this conclusion Grzegorz, I have read your post on other matters and you seem with it, however please explain your comments.

I might add if the American economic situation gets worse and I suspect it will you may well be right.

It seems to only mention Warsaw flats. City centre flats, especially the new build are always likely to lead the way in declines.

can I just add this just a pee in the pond, it could be 40 odd per cent

so is this a good time to buy? or should i wait to see if they drop a little more?

I am personally waiting a few more months. I think prices will drop more.

Agreed. The article only speaks about the 'flat' (apartment) component of the diversified real estate market. Anyone owning land, forest, farms, etc in excess of 1 hectare are still in good shape. That's because, those types of properties have not been fully opened up to foreigners, yet. Everyone that I know of who owns such properties in Poland haven't seen any decline in value of their holdings, mine included. Potential investors in Polish real estate should be taking a good look at real tangible property investments, like owning a form of land (with or without a house on it) instead of a 'space' within a building, for which you are required to pay (in most cases) monthly maintainance fees.

Exactly what is this obsession with farmland? Are highly paid corporate employees more likely to need city centre apartments or farmland?

I'm also curious to know from what level these Warsaw city centre apartments are going to fall "40 per cent". In the last 3 years they have been sold in the price range 10 to 20 K PLN/sqm. That's one hell of a range.

The trend can be seen in other countries that have engaged in large scale urban apartment building such as Spain and the UK. Hundreds of empty unsellable properties sitting vacant and in negative equity for their owners. Theres no reason I can think of why Poland should be any different.

I did not only focus on 'farmland' specifically. My comment mentioned "Land" (could be agricultural, commerical, industrial), "forest", and 'farms" (arable land with or without building structures), "etc". There is no obsession at all. I was only pointing out the different forms of real estate, which reflects that land prices in Poland continue to rise or remain stable because they are still so much lower than prices in most Western European EU countries, with the exception of the Eastern region of some parts of Germany. Also, my comment was mainly for 'potential investors', and not 'corporate employees' who are only in Poland for job and employment purposes.

Actually. it wouldn't be a bad idea for a highly paid corporate employee to invest in some vacant farm which contains a home that can be renovated nicely, and is located on the outskirts of a major city where the employment is. That would be nicer to own than a flat if you enjoy breathing space. It also depends on what type of lifestyle you are looking for though. It certainly isn't for everyone.

Question, meet answer... It's a speculation thing. Landowners are banking on the possibility/probability of farm land (especially near cities) becoming easier to reclassify as building land, sell to a developer and never have to work again.

Sorry scorpio, I didn't mean you specifically - it's just that I've seen many people tout farmland, forests, orchards etc. as THE investment to go for purely because foreigners cannot buy it - the reasoning being that as soon as they're allowed in they'll drive up the price. It's far better to look at inherent value and utility.

Actually there is a Polish "corporate" and entrepreneurial middle class. It's small at the moment but growing.

Kilkline - in the UK there was a large amount of new development on the outskirts of cities, where no one wanted to live. Similarly in Spain - there was a great deal of holiday home development in coastal areas with no land restrictions. Land in the CENTRE of a national capital is at a premium. Hence Warsaw high end is a different market.

Well, in short words I hear and read that this is what smart people think and I don't see any reason why I shouldn't agree with them... But that's 2009 alone, later we may only guess.

Put it this way.. it is doubtful prices will go up this year at all so there is no real need to rush out and buy asap. If you are looking to buy then this means you can take your time and find the perfect place.

It is of no conciquence how atractive the price of property is, if you cannot get the finnance it's too expensive for you....

If you have cash to spend you could be on a roll............

Now is a good time to buy. Everybody is all depressed about the price of properties, speculators who thought that they were going to make a killing are waking up to the reality of losing their shirts, developers are frantically trying to convert residential schemes into offices, estate agents are throwing themselves from tall buildings (unfortunately that last bit is wistful thinking).

This time next year prices might have gone down 10% more. But then again they might not, they might be at the level they are now. Who knows?

The point is that over the next ten years you are going to do very nicely either way. And if you're looking to sell within ten years, you probably shouldn't be buying property anyway.

Ha ha.

Seems like emminently sound advice all round from Harry. The long term view is what is required so if you can afford to tie up capital then get out there and haggle.... but not with my flat though.

Yes. It does depend on the location as some cities are more prone declines than others. I think you can probably include, to some extent, central Krakow as a solid market along with Warsaw as there is minimal development in there and so a finite number of properties.

This is probably true, but it is also worth considering what is going to happen to the currency. Take America as an example - prices have largely dropped since Christmas 2007 but the value of the $ has strengthened. Better deals to be had earlier rather than later

Is the proportion of American buyers particularly high?

No, that was an example, not the point

but the US dollar is a different story to the zloty. Before the panic set in.. the US dollar was dropping like a stone. My basic take on what has happened with the US $ is that investors have pulled their money out of their investments in other parts of the world and put them into cash. Naturally they are going to put them into cash in their own currency. So the result is a flood of money back into places like the US and Japan. The same thing in fact has happened with the YEN. If it wasn't for the fact that these nations had a large population of investors then their currency would be tanking. I would personally hedge my bets on the zloty taking a further slide. My thoughts are that with poland, it is only just now that foreign investors are realizing the potential for losses, so there may be a movement of foreign investors taking their funds away from poland. (perhaps someone with a bit more knowledge of currency markets can confirm/contradict/elaborate on this)

Of course. But the point is that these, and other currencies, have not been alone in their fluctuations over the last couple of years. My knowledge on the currency market is as limited as yours, what I had tried to say was that there are factors other than face value that will influence the best time to buy.

when markets are going to the drain people are buying american dollars and gold, history

Since I posted the original post there has been some interesting comments, some comments suggest to me that people are trying to justify why they have purchased a property/apartment in Poland, hmm interesting.

From my point of view, I purchased a apartment approximately 8 months ago and I can say quite honestly that it has gone down in price some 10 to 15%.. and thats if somebody was prepared to pay for it, I know all too well that Poles are funny when it comes to buying real estate, they look at the price and say oh well, I could buy a vacant block and build myself. The point being that a lot of homes are advertised and never sold. It does not bother me as I'm in for the long haul and have no intention of selling.

The frightening part is that (It must be a consideration of all buyers and sellers) is the rate of the US dollar. In the spate of 6 months it has moved from 2 to 3.15zl. This relates to a 35% variation of the price of a home or apartment..

Bolek, what did you purchase exactly, where, and for how much? If you don't mind me asking.

No problem! :-)


You can count me into that statistic.


Over 7 years ago, I purchased two vacant farms and rebuilt a house and two other buildings on one of them. My holdings include over 10 hectares of mostly forest. I must say, since 2001, the value of my property has increased quite dramatically.

I would think, almost anyone who bought around the year 2001 or before that, made out nicely. Can anyone else give your story? I'm curious.

Well done and congratulations, I hope you are Polands next multi millionaire, true people buying around that time made good money.,


Prefer not to say in case I give wrong messages to people who have purchased at that location. Keep in mind its only when you sell a property that you gain or loose on the transaction.

The point being when I purchased my apartment I paid $160,000 (US) If I was buying the same property today and as I mentioned before the place has gone done some 10/15%. I would have paid about $105,000 US. Thats occurred in a 7 month period..

Get the point!!!!!!!!!!, You can make a lot of money in buying and selling currencies, the point to be made also, this would not effect a person living in Poland and not using foreign currencies.

Yes. It's the one I just made. And potentially an important one