Poland property boom over????

Deise 07:

all you say makes perfectly sense but some points have me thinking.

i am working as an architect in Leeds and so far we are still very busy. our office in Cork is not suffering yet either. both might be because the company is big enough to be able to deal with the effects.

back in germany, which is my country of origin, the whole development sector starts kicking in right now, which is partly due to the general rise out of the recent recession in germany.

nevertheless i believe that germany and even more poland are not so much dependent on the developments in the US (other than in the UK) so the effects should not be as harsh as in the uk or ireland.

i know of quite a few irish investors we work with who are still very interested in investing their money in polish developments (or elsewhere on the continent)... well... they apparently have to if they have nothing to invest in at home anymore...

Good post Deise 07 but you should look more at attributes of a given market, not only on global trends and in this case It means that:

- there are a few million of Poles without their own flat, millions live in shi*ty communist era blocks and would like to buy something else.

- salaries are incrising (probably 10% this year) and people working abroad are bringing billions each year.
It means that the market is not going to crash, of course prices are not going to grow much because very few people would afford them but except few places where the bubble really exist, they are not going to fall down. In the next 1-2 years average prices will probably fall down by few % (those in few really overpriced places will fall down seriously, the rest will be quite stable) and next will start going up by a few % a year.


Piggy, don't force me to hurt you...

Good point Grzegorz. My girlfriends parents from Poznan are in that category. However, as you then said


That is why I would worry about prices retaining their values at current levels. I believe a harsh recession is coming for the countries which I mentioned in my first post. These are some of the countries to which Poles have emigrated most. This will probably affect the amount of money coming back to Poland. The question I am asking is whether, if that money dries up, the domestic Polish market can sustain prices, some of which are high even by western european levels. Is salary growth of ten per cent sufficient to sustain these prices? Im hoping it can but Im no expert on Polish economic affairs.


Thanks for the response Falster. I hope your right. Personally, Im not so sure that is the case as I have a feeling that there is a serious systemic problem in the banking system right throughout the capitalist world and it is going to get a lot worse before it bets better. Deutsche Bank were in trouble ths year. Im also thinking about Northern Rock, BNP Paribas, Bear Stearns etc. Without wanting to sound too alarmist I know a guy who wroks as a trader who told me that a number of people at his company dumped their entire portfolios just before Christmas. They are convinced that we are all sailing into a shitstorm. In the US, some respected commentators are likening the current problems to what happened in 1929 just before the crash and great depression. Im very worried about the whole thing, especially as my Polish girlfriend recently bought an apt in Poznan (against my advice).

As for Ireland, there is still demand in the comercial construction sector but it is not going to last. Housing is down by unprecedented levels and figures now show that rents have begun to decrease. Your Cork office might be working more on the commercial sector - just a guess - but we in Ireland are about to pay the price for concentrating too much resources in one sector (construction), which along with related industries accounts for 20 to 25% of our economy. Even Germany post-1989 wasnt at that levels and you know better than me what happened next.

Still, as somebody once said its good to live in interesting times...

oh yes, i do. we had some pretty cr**py two decades... many of the reasons were homemade. the two biggest ones were the reunification in which our economy had to cope with 17 million more people plus a derilict country, and afterwards we decided to sponsor the currency union...

even the strongest economy would have had to suffer.

but mainly for the same reasons as we now tackled the original main problems (kind of), we can look forward to a moderate growth, not only with the economy in general but also in the property sector...

okay. that has not so much to do with the situation in poland but i wanted to mention it to not leave your post unanswered and also to point on that the situation in different countries can be influenced by world economy in different levels...

lets hope the best and keep our eyes open...

Greed allied to cheap abundant credit in the Uk and Ireland has driven the market up, fear and mortgage reset shocks with bring it back down.

People (myself included) started to think a few years ago that a house was not a home but some kind of fail safe money spinner. Can't go wrong with bricks and mortar eh?

However, the smart money moved away from property 12 months ago. Trouble is the global stocks have also take a bash in this time as well. Speak for yourselves, my money is going under the bed in a buscuit tin!

I think regarding Poland, I hope that the market will only see inflationary rises. Simply the growth that we have seen in the last 5 years is no way sustainable. The greatest tragedy is that very few ordinary hard working Poles with young families that I know can now not afford to buy even a small apartment. This is wrong and completely demoralising. Greedy foreign investors and speculative house developers certainly have a lot to answer for.

I compared property prices in Worclaw and Niagara Region in Ontario. Where I live the location is great. About one hour drive to Toronto (if someone feels like crowded metropoly) or 40 minutes to the US border (if someone has a knack for cheap goods and crazy checks at the border).

The other day I looked at property prices in Wroclaw. If I wanted to buy a place over there then the sale of my 260 sq. m. house with a decent size lot in Niagara would give me enough doe to buy a small (60 to 80 sq. m.) apartment.

It looks like going back to Poland is a little too expensive for me.

People working abroad are important for Polish economy but their influence shouldn't be overestimated, besides If they lose their jobs for example in Ireland they will simply move to another EU country or go back to Poland, where salaries for experienced construction workers are really not bad and in the next years there will be many new jobs in this sector.


If people used to buy when they were making 10% less then I don't see the reason why shouldn't they buy for the same prices when they have 10% more money. Generally there are no domestic reasons for any crash on the market. That could be only the result of external factors and as a share of foreign speculants is rather small and economical situation of Poland is quite good then It would have to be connected without a really huge global crisis, there are some bad things going on but I doubt that It will be so bad.

Well thats positive. I hope you're right.

Sorry, don't necessary prescribe to the doom merchants. I work in the construction industry which is regarded as a primary indicator as to when things are good or bad - so far there is no change, in fact I and everyone I know are as busy as ever.Yes there is a change in the economic climate coming. I believe things will tighten up financially. I think those people who have (in the UK) lived beyond their means, taken out huge mortgages, have big unpaid credit card bills and had not experienced the bad recession years of the 1980's & 1990's will now learn a very hard lesson. You cannot live continually beyond what you can afford. However the underlying economy here is OK and I think, as with most countries things will bob along for a few years with before we see an improvement. Countries such as Poland will continue to grow and expand. Life goes on.

Saw the news tonight it is far cheaper to buy propertiy in Germany than it is in Poland now!

have you got any figures? or further info on that?

i am sure that is not for entire germany's average. property in the east is generally cheaper than in the west as many buildings are deserted because people had to follow the work (ie gone to the west of the country). maybe that is where you might be able to buy property cheaper than in poland...

but to be honest i don't really believe that this is generally true... maybe regionally or even only in the odd case...

i'd love to have further info on that....

thanks

Sorry I cant give you more info as this was on the Polish news channel and I got only the basic translation.

But the interview that was on lasted about 5 mininutes

plenty of cheap (very) in berlin and other parts of the former east - i have a friend from the border near czech republic who has just bought a property at similar price to poland a number of years ago

I've only seen few exceptions of similar property in Germany being priced lower than in Poland. By no means does this represent the aggregate situation. To be more specific, right now flat prices in Warsaw and Kraków are are slowly climbing towards the average Western European (Ireland to Germany) equilibrium level, and in some cases, even higher. When it comes to rural properties (farms), prices in Poland are still much lower than in the West. There is a valid reason for this though. There are no restrictions on foreigners purchasing flats in Poland, but there are heavy restrictions on foreigners wishing to buy farmland. This by itself is causing larger demand for flats (because of the simplicity involved in purchases) and thus pushing up prices. The foreign demand for rural properties has been termporarily stalled for the time being due to strict laws. Nevertheless, many foreigners are still finding ways around the regulations. The largest obstacle is trying to obtain permission from the Polish Interior Ministry. That process can take a while and many phone calls to your lawyer, and many aspirins. Please provide valid sources (links) of properties in Germany now being cheaper than in Poland?

I'm looking to buy a home in Poland.Whats the property market like?

Most of this thread talks about Property as if it were stocks and shares. When it comes to Poland future prices will also be determined by improved infrastructure. Will it happen. Yes - in the next 5 years 37 bn Euros will go into roads, rail and air from the EU plus the same again from the Polish government and private enterprise. This year the government is planning to build over 1,000 km of motorway and express roads.

This type of investment will help the economy grow and with it property prices. I don't see anything of this scale about to happen anywhere in Western or Central Europe so for my money when it comes to Bricks and Mortar Poland is still the place!

And the US - same as when endowment mortgages were mis-sold in the UK. Everyone said it would all come crashing down and that was over a decade ago. America is not as important as it used to me - Europe can manage on its own.

Is Germany cheaper - well actually parts of East Glasgow are cheaper than places in Warsaw so maybe I should make a sweeping statement that it is cheaper to buy in the UK than Poland. These broadbrush comparisons are crazy. I am looking at a 200 sqm house within an hours drive of Warsaw for 30,000 GBP at the moment - I don't think I would even find a burnt out insurance job within the commuting belt of London for that!

Or within an hours drive of Warsaw for that matter! 200 sqm. I don't believe it. Not a chance. The exchange rate at the moment is 4.7 zl per 1 GBP. So therefore 140,000zl or 650 zl per m2. . . Forget it. Your legals alone are gonna be circa 15-20,000 zl.

Hi there
interested in your Comments
How is the house market prices I Know apartments and flats are expensive but have house prices eased up as well.
Looking at buying a house in the Wielka Wies region of Krakow what should i Expect to pay?

estate-pool.com

as i said, there are a lot of very cheap properties in germany so you might need to define your search criteria - try for flats, 75-150 m2, photos only, max price 15K GBP and see what that produces

failing that, see whats on the market for less than 10K GBP

could you then please provide us with valid sources of similar priced properties in poland

visit channel 4 property abroad forums to see what people are saying about german property in general

HEY,HEY....its me Ratty..HEY,HEY...

But seriously I think there's lots of money hidden in biscuit tins under beds all around Poland.

Also vis a vis credit, which is the enslaver of the worke. Itr is becoming more and more available to the Polish consumer. And many as they have been in the UK will work to pay, the bills. The cycle of debt. C'est la vie.

Very much so but you are right, this does not include the legals. The house is shagged and it will cost the same again to sort it out and there is currently only a gravel access road but that is exactly the kind of pants infrastructure to buy in - it won't always be that way.......

Legals - I pay about 6,000 PLN for mine - I think your getting ripped off!

I think because its only been in recent years that property prices have risen significantly in Poland they should be okay, you must remember lending is a major factor in the UK and Ireland the banks have been throwing money at people and people are in over their heads - repossessions are on the increase and will continue to grow over the next 12 months, new builds are not selling because people cant or wont pay the kind of money developers want, whilst house prices have dipped they have not dropped significantly in the UK as yet, if they do a recession will be inevitable.

As for the construction industry which encompasses surveyors, architects etc., there will be a drop in employment, how large this will be no one can speculate at the moment.



You are funny, I suggest you look at how much Network Rail have spent on the WCRM upgrade, or then have a look at how much we spent on the Chanel Tunel or then again you could have a look at how much was spent on the Thames Link project, or on St. Pancras Station or on Manchester Piccadilly on our numerous airports...blimey...as for motorways we are updating and upgrading all the time...

I can assure those properties are out there and for less, if the client buys direct from the owner the only fee will be notary approx 2,000 PLN and 2% tax so possibly legals as low as 5,000 PLN.

Wrong end of the stick Shelley. I know the UK is upgrading all the time, I live here. The point in Poland is they are building motorways where there are now just two lane trunk roads. They are building airports where there is nothing. The money in the UK is for upgrades, the money for Poland is to produce a step change and with it there will be a step change in property prices. Is the UK planning to build 2,000 km of brand new motorway over the next 5 years? .... no. Is it building 5 new international airports? No.

One more point - 70 bn Euro goes alot further in Poland than the UK. I know we spend billions on upgrades but in Poland a billion builds more. Can't knock the UK, I live here, but Poland is a step change, not an upgrade.