Real Estate /
Is there a Real Estate bubble in Krakow? [60]
Why is real estate so expensive in Kraków?
It has always been so. Krakow rates as the second, sometimes third most expensive city in Poland, after Warsaw or Poznań. I can say it is snobbery - most Poles know Poland`s history and Krakow is considered a very attractive place. It sounds impressive when you say you live in Krakow. :):):) Besides, don`t forget multiple job opportunities, excellent schools, entertainment facilites ect.
Who can afford the houses/flats?
Firstly, the buyers are Poles. They have better jobs and earn more money every year, either in Poland or abroad. Of course they are not able to put the sufficient cash on the table, so they take bank loans. Banks are only too happy to give them, and before giving a loan, they make sure how to avoid losses. If a buyer can`t repay the loan, their property will be taken by the bank.
Secondly, another category of buyers are foreing investors. Yes, they had correctly predicted that after accessing EU in 2004, real property prices in Poland would rocket, just like it had happened in Spain and other countries before. They entered aggressively and bought a lot.
There are still more factors which make prices so high. The main problem is there are simply not enough flats, and it is a result of the lack of land. Cities linger with transforming arable land into construction areas. It is a matter of beaucratic regulations.
Guys, especially Vafunkoolo, stop talking about speculation. Let me remind you that Poland is a capitalist country and there is a free market. One can buy and sell whatever they want. Yes, there are certain restrictions, Lwowska mentioned 20 years` time, in Poland it is 5 years within which you can`t sell purchased property without paying profit tax.
But a free market means that the seller sets the price at the level which is attractive both for him and the buyer. Isn`t it so?
I wouldn`t count on the bubble to blow up, like in the States or elsewhere. Since January 2008, prices in Krakow went down by .....1%, and the experts say they will be stable for the next few years or will even go up a little higher.
I am sorry, guys.
But I am also quite satisfied because when I eventually decide to move from this noisy, crowded, polluted city, I will be able to swap my current flat for a decent house in the coutryside 50 km from Krakow.