Poland property boom over????

Having studied the Polish property market for many years and as an investor I am lead to believe that the days of 50% capital appreciation in a year are now officially over within Polands 1st and 2nd Tier Cities.

Wroclaw of course along with other main cities has now almost completey resorted to a standstill in terms of property prices. Certain developers are actually offering discounts on multiple unit purchases.

Is this a result of the average Pole being priced out of the market or greedy developers pushing up the prices prematurely?

It is over. I predict slowly but steady decrease over the next few years.

what else would be the problem.. the only way i can see it going way up again is if the american anti missile batteries are put in as that will make everyone all nice, cozy and safe. lol

If you mean the end of paradise for speculants then yes but the prices aren't going to fall down (at least not much), so people actually building things can still make very good money.

Very, very good money - just don't buy in the centre of Krakow or Warsaw but look as you would in any country for areas with potential. North East Warsaw is a pile of pants at the moment but in a few years prices will have tripled and the usual doom sayers will be kicking themselves!

hey any advice or predictions for Katowice and surrounding area (other than never move there if i don't have to)?

I may be wrong, but I wouldn't put my money on property in an environmental disaster zone. Now Silesian countryside is a whole different story... There are some real gems out there, and I'm sure sooner or later there will be plenty of takers.

you make a strong case by pointing out what should have been obvious to me cyg

Rural property is a long term investment.

You say don't buy in the centre of Krakow? What is your thinking on this? I'm curious because i would love an old apartment in the old town as would anyone here i guess. More than anything to live in for part of the year and be able to call my own than to invest in. I understand that prices here are almost double what they are in the area outside the old town. Is there any thoughts on whether or not there will be a drop in the central areas? Or just little to no growth?

I sell property in central Krakow. There is no doubt prices have stopped going up in Krakow in general. The average per m2 price is now around 7500 PLN for the entire city and suburbs, though in the centre you can pay anywhere from 10000-20000 PLN/m2. Prices in the last six months have been fairly static. We have seen lots of developers trying to sell apartments (often renovation projects) at prices in the region of 15000-20000 PLN/m2, but to be honest, I don't believe many have been sold at this level. This was too high (for all but the best/most exclusive of developments) and most investors aren't stupid. In the range of 11000-14000 PLN/m2 there are some good offers currently. This is not cheap, but then again, the old town and surrounding areas in Krakow are not big and there is only a finite supply - the suburbs are a different story. Most people will be willing to pay a premium for an apartment in a building which has been entirely renovated and doesn't have potential problems with installations/roof etc or with neighbour feuds. I agree with Property Secrets, who predict that prices in Poland will be stable for the next year or two (though rents will be increasing), with the second round of capital growth (10-20% per year) starting again in 2010. If you get a nice apartment in a nice location for a reasonable price, you will still make money in the longer term. Poland is still in the early days of it's development/growth phase and wages are growing at 10% per annum.

$3000 per one square meter? No, thanks.. still too much, considering an average apartment is very small (50-60 square meters).

As someone in the "Poland Real Estate" thread had previously mentioned, property prices in Poland will continue to increase until they have reached a level similar to their Western European counterparts. I also believe this to hold true. On the flip side, anything ridiculously overpriced, being higher than similar properties in the West, are due for a downside correction. It works both ways. I think she said, 'prices of all goods and services in the EU will eventually reach an approximate level of equilibrium', with some minor differences always existing. The laws of supply and demand within the EU will set the prices.

Right. But then you should also assume Poles don't live in Poland, only their brothers from the West live in Poland - because then you only take the real estate prices on the West, but ignore average salary of Poles versus Westerners.

Hi 'hello',

As much as one would like to believe and support the above statement, unfortunately, in today's Polish real estate market, the salary of a resident living in Poland is now a moot point. I say this because now in the EU we have the freedom of labor, goods, and capital. Since all foreigners can purchase flats in Poland just like a Pole can, this is a good example of this theory in practice. It is mostly foreign invesment and ruthless speculators which are responsible for the terrible flat prices in cities like Warsaw and Kraków, not local Poles. In fact, most Poles who work in Poland cannot afford these kind of prices. Poles that work in UK or Ireland for example, could. This was a grave error on part of the Polish government during the early days of democracy and EU membership, to allow unrestricted purchase of flats by foreigners (non-Polish citizens). Example: Irish banker sitting in his office one day is thinking to buy a flat in Warsaw. He takes a holiday and travels to Poland for several days, looks at a flat in Warsaw and bids a higher price than the Pole who wanted it, then buys it and goes back to his home in Ireland. This is a scenario only too common. The Polish government should have enforced restrictions on 'flats' similar to those of land/farm purchases. That is now water under the bridge and cannot be reversed. The same is already happening with farms and land but on a much smaller scale due to the helpful restrictions in place. When the year 2016 is reached, the market will be completely open, and prices will only escalate up until that time.

there are a hellova lot of poles who have sold property at these kind of prices, set by them and not foreign speculators, who are now exceedingly rich and laughing all the way to the bank

those who say that the boom is over are as credible in their prediction as they have been in predicting that the boom was about to start and go where it went. most of these people failed to predict the latter, why should they be right in the former?

the point is that prices went up fast and without any serious criteria. terrible new projects, very similar to the ugly soviet blocks of the past, have been selling at prices much higher than what is justified by their quality. even if you were buying something blind last years you could make profit. this was abnormal and this is OVER. now again the real estate rule applies:location, location, location - quality, quality, quality.

the prices may fall for the stupid projects. the prices will level for average. first quality projects will appreciate further. prices overall will continue to grow on a part with the cost of living - 3-4% yearly. all this in normal circumstances. if the world turns up side down, then no base for prediciton.

lodzinvest has speculated heavily on the "correct" and has flipped it for a profit on this thread!

The thing is that in some cases they are already higher than in Western Europe If you compare them to similar locations over there, you can't compare Warsaw with London because the second one is a financial capital of the world and the first is at best a capital of Central Europe.

Poland property boom over?

Who knows.....

No-one....


But they only represent a miniscule part of the market........its your own local speculators who drove the market mainly.


Shuda read Bubbs post first!!!

I develop in the area of Jelenia Gora - x3 sking resorts beautiful mountains and previously being part of Germany stunning architecture 15 mins to Czech 45 mins to Germany....the prices to buy 2 years ago were excellent....not many bargains now, however now I am finding beautiful flats 100 sq mts ex community, bought by Polish residents from the community for very little, who are not able to afford the refurbishments and are selling them privately 40 percent below market value.....still many opportunities out there

Bubba weee Yeah your right all of my friends here who are Polish have made a killing setting thier own prices and achieving them.....some even develop on the side. Its not just the Irish investment banker.................

Develop what ?

Remont/ do up....flats and houses

Ok...

Grzegorz, what you mentioned [above], I already stated in an earlier posting [below].

yes right and Prague is just a village

No, It isn't.

And since when has a Polish person known anything about any property market, get off this thread muppet. That is of course unless you have a stamped & signed authority document.

In my opinion it is over, and it is really good.

Why do I think so, there is much more new houses builed and when and numbers of permitions show that there will be more properties builded in nearest future.

Inflation increas and rates will increase so it will be harder to get loan.

Prices are extreamly high esp when we look on earnings. (properties are some times more expenisve than in Germany)

Last time we had typical eufory characteristic for last period of trend.

People have begun to realise that there has been a wordlwide bubble in the property sector over the past 7 or 8 years. The market has crashed in the USA. It is in the process of crashing in Spain, Ireland and UK, all places which have seen the largest increases in prices during that period. If the Polish market is reliant on foreign investors from these countries then it will be in trouble very soon. Id like to know what percentage of the market they have made up. If the market is being propped up by Poles working in Ireland, it should be remembered that its quite likely that many will lose their jobs in the next 12 months, especially if they work in jobs related to the construction industry, which has gone off the edge of a cliff in Ireland. Figures out yesterday show that 60% less new houses were begun in December 2007 than December 2006. Thats a massive decrease in activity and unemployment will be the result. If domestic Polish salaries are not high enough to sustain the prices in Poland, then what you have is a speculatice bubble similar to the other countries I have mentioned and the market will crash. Id be interested to know whether people believe that Polsih salaries are growing at a level which could sustain the prices.

People should also remember that there is currently a crisis in the global banking system, a credit crunch as it is referred to. The result of it is that the Banks who were throwing cheap money at people until recently will not now lend people the money required to keep the prices high. Prices must come down or else there will be no activity in the market. I belive that Polish banks have been stricter in their lending procedures than their Irish, Spanish or British counterparts but Id be interested to hear whether people here are in agreement with that.

Any thoughts on what Ive posted??