Real Estate /
Buying a flat in Krakow; prices are still falling? [200]
Prices have been relatively stable in Krakow for the past year, after falling 20-30% from the peak in mid-2007. For the past few years, it was possible to observe a kind of stand-off in the market, with a big gap between expectations of buyers and sellers. In recent months, we can see this gap getting smaller, and so more transactions are now beginning to happen.
One of the biggest problems in Krakow is the unrealistic price expectations of owners who want to sell. Many of them won't accept that the true market price is actually much lower than the price they think it is worth - this is made worse by many agents agreeing with the higher prices of owners. Why they do this is a mystery, as they can't sell these overpriced flats and hence won't make any money from the sale.
It looks to me like more owners are willing to accept the 'market price' now, and that is the reason why the levels of transactions are beginning to rise. Buyers are also finding it easier to raise mortgage finance now than in the last few years, and many that have been on the sidelines for the past few years can now see that prices have stopped falling.
Another positive for buyers is the larger stock of mainly new apartments, which can be bought either from the developer or on the secondary market. Whereas a few years ago, buyers had to take the risk of buying off-plan and hoping the developer would deliver, it is currently possible to choose from a lot of new apartments which are ready for delivery - buyers can see exactly what they are getting, which is a big advantage. I believe this excess stock will have largely disappeared come the end of 2010 and the beginning of 2011, and many new developments have been started this year by developers, which won't be ready until late 2011 or early 2012 - so if you don't buy this year, you will probably have to buy new apartments off-plan again next year.
At present, pretty much all offer prices, whether the property is new or second-hand, are negotiable, at least by 5% and sometimes by more than 10%
