Buying a flat in Krakow; prices are still falling?

Merged: BUYING A FLAT IN KRAKOW - PITFALLS? TIPS? VALUES GOING UP OR DOWN?

I want to buy a Flat in Krakow - Centrum. Any advice to a newbie? The lawyers fees, commissions, etc all seem pretty straightforward... but what am I missing?

The agents certainly operate differently than north america - here I have to struggle to book showings, I am the one chasing the agents, fighting to see things. On the other side of the pond the agents are 'hungry' and will call you and actually follow up, send you email property links, and hustle for their commission.

What is the story on property values in Krakow proper - going up or down?

anyhow I digress... any advice appreciated :)

Take it with a grain of salt, and I am slightly exaggerating, but:

Real estate agents in Poland are the biggest bunch of useless, lazy, clueless, rude bottom-suckingleaches you'll ever find anywhere in Poland. Their job consists of simply opening the door and telling you "here is the bathroom, living room, etc.". Zero leg work, most don't even have any basic building knowledge like types of thermal insulation or roof construction... and for pretty much nothing at all some still want a 2% or 3% commission, from both parties. Unreal. Some fraudsters even demand a 50 to 100zl payment to se e an apartment...

Oh yea, prices are falling like a rock and going to be going way way down, but that doesn't seem to faze most sellers who still believe their crumbling apartment is worth 15000zl/m2.

Without having too much knowledge regarding this, I'd say that the prices are in general falling not drastically but they are going down.
I bought my apt in Krakow 3 months ago through property consultants Leach&Lang and I have been very satisfied with their service. They even helped me negotiate a save quiet good amount of money on my apt.

But yes, in general real estate agents in Krakow blows!

They're not falling like a rock at all, and they aren't going way way down. All the evidence shows that the tightening up of mortgages is causing a decline in prices, but nothing major and nothing that could signal a crash. Mine has gone down around 7-8% from the price that I bought at - really nothing to even blink an eyelid at, especially if it stops problems down the road.


Slightly exaggerating? I'd say you're making an understatement. They are absolutely awful in general. I've never met one that actually had half a clue - my place was found (and bought) privately with no idiotic agents sitting in the middle trying to collect money. And yes, the clowns who try and demand money for even seeing an apartment - what planet are they living on?

I suspect things will improve for the better once the need for them to be licensed ends.

Anyway, a good trick and common in Poland - if you want to buy an apartment, don't be afraid to put letters into the postboxes of people inviting them to sell. I got quite a few people calling me that way.

A decline in prices means there is no reason to buy, as its not an investment. Nothing major, just wait until prices bottom out 20-30% below what they are now and they start rising for a few months.

As he said, its not a crash, just a very good reason not to buy now.

Pretty much. It's not going to collapse, but with the banking conditions at the minute, prices can only go down a bit more.


Buying now just wouldn't seem sensible at all. If the Government refuses to let the banks ease up on lending, then prices could keep going down slowly for a while. It's no secret that in some areas, prices were ridiculously overvalued - Krakow centrum would seem to be one of those.

I bought my flat in 2002.
The best advice I can give is ...LOCATION and if you're paying cash - negotiate.

terri
location part agree but certainly not the CASH part as the owner will get cash all the time until you wnt to save on VAT which the tax department will catch on after 2/3 years so what if you have loan from the bank owner still gets all cash:)

Sorry i'm confused - what VAT are you talking about?

my understanding is i buy a flat for 100,000zl. pay a 2% commission on top of that, lawyer's fees around 1500zl. and thats it! Then of course the monthly "condo" fee of 100zl or whatever.

are there any other big fees, taxes etc?

I have no idea what he is talking about.


Except for one consideration, the Zloty is weak now. If it gains another 25% its can negate an equivalent fall in prices. OP is buying in CAD.

Would anyone bet on the Zloty at the minute? It already took several tumbles without any justification whatsoever and has appreciated randomly, too.

Yep.

A good trick is to go to see a place you like with a Polish friend to translate for you. But they tell the agent that they are the person who wants to buy the flat and so the agent signs the contract with them. If you like the place you just speak to the owner and tell the agent to take a running jump.

Just wait.....the housing crisis is just at the start in Poland...and Europe...What happpend here in the states is just beginning in Europe... I have already seen flats going for 80k PLN.....

errr...so wrong
See; Spain, Ireland, Portugal, Greece, Italy, France, etc etc

Have you been in a coma for the past 4 years?

Hello Maluch,

Many have posted to you since you wrote. My wife and I bought an apartment this past May. Here is our friend and agents name whom you should go to. You can trust him that he will work for you very hard. Make sure that you give him my name--Jan Blacha.

Kierownik Zespołu
Tomasz Myśliwiec
kom. 506 000 821
hen.pl
Home Express
ul. Pijarska 9/5A
tel: 12 433 51 24
fax:12 433 51 39

Another agent that you can try is Dominika Stanek at Neodom. She was a previous agent of ours and very good.

Both agents are trustworthy and will work hard for you.

Janek
janblacha@poczta.wprost.pl

Hi Maluch,

Now on everything else.

Have property prices fallen? Yes they have. Will they go lower in my opinion? Maybe, but at this point the good units may be sold first. But these apartments are still out there. Some have been taken off of the market but new ones come on every day. However, the market is stagnant and nothing if moving on a larger scale. My wife and I started looking nearly 5 years ago. We went through the years before the market rise, during the height of the prices and the fall of the market. We looked at nearly 150-175 units! The agents on the most part have a small window of patience and want a person to buy within their own time-frame. Normally, they will try to tell you what apartment they think is good. You could find an apartment within a year. Our problem was that we were buying a place to live full time and both my wife and I had to agree on a unit. I could have bought in a year

The next item would be if you are buying on mortgage or cash. Once you have a property in mind, you can do the transaction in 1-2 days. Be sure to have a Polish bank account.

Janek

From the States? You must have good vision.

ober-haus.pl/files/pl/files/en/reports/actual/Ober-Haus%20Polish%20Cities%20Apartment%20Price%20Index%20September%202012.pdf

Cheers for that one milky. I seem to remember a certain somebody saying on 19 October 2011 "Denial has sunk deep___ but!!!, without the government's phony grants(interfering with the market when it suits Banker-developers), Prices will go down +20% this year, is my bet."

Demand for apartments low in Poland's main cities

So, given that no a single one of those markets has seen a fall of even half of your prediction, isn't it time for you to pay out on that bet?

My mistake man, I thought those phony grants, that pay the interest for 7 years had ended in April 2012; they are not officially over for three more months. That's why the prices haven't fully fallen yet.

So you mean that prices will have fallen by at least 20% year-on-year by 1 January 2013? What amount of money are you willing to stake on that?

Merged: Details about buying a flat in Krakow

Hi all,

I am really interested in buying a flat in Krakow. However, I don't have that amount of money. But I believe your replies with guide me to prepare myself.

I am not a non EU citizen but I am working and earning a decent living here in Krakow.

As my girlfriend and me, we want to move in together I was thinking more about buying a flat than renting one.

I would like to know:

1) the minimum amount of deposit of the value of the property- the banks would ask for the mortgage.
2) agent fee
3) legal fees & paper works
4) any other cost I might incur during the purchase of the property.

Thanks

Hello.

Last year i bough apartment in Krakow.

i took credit in PKO bank. i dident find any problems at all, I am from Norway and we are not a part of the EU.

in the bank they just wanted details from my work payslips,contract ect. (since i dont work in Poland) and as long as you have a monthly payment above 10k Euro there where not a problem at all.

the contracts and legal stuff my girlfriend fixed (went to the Notaries office and made her a (power of attorney)

there are some fees that you pay to the notaries office but they are small. like 5-10k PLN (i don't remember but i think its a % of the value of the real estate )

hope it helps.

i payed 35% up front in cash.

all contracts and stuff are done in the Notaries office. first a pre-sales agreement and later a final contract meeting.

monthly payment well above $10,000? What kind of apartment did you buy?

2 level w/garage. But the bank just told me as long as was a non EU citizen and didn't work in Poland they had some demands.

and they told me they could give me credit based on a 35% input, up front and a average monthly income above 10k Euro. and permanent work contract.

but i guess it is a consideration of the bank, Income/ cash input/ value of the real estate.

i guess you have to get in touch with a bank, "mortgage agent" and find out what fits for you.

If you work in PL or other EU country it may be a different approach.

1) the minimum amount of deposit of the value of the property- the banks would ask for the mortgage.
For polish citizens in the law there is no demand of deposit. It will change from next year when it will be 5%. However some banks want it, but no more then 20% of total value of transaction.

2) agent fee
Depends on the agent - usually from 1-4% of property value, this cost is highly negotiable, so worth to check in multiple agencies. Everybody has to posses license, so they are proffesionals.

3) legal fees & paper works
If you are not EU citizen you might have to get a permission for buying a property. The transaction will be handled by agent and notaries. With the credit they will want you full time working contract.

4) any other cost I might incur during the purchase of the property.
permission for purchasing a real estate, market shares, stocks by foreigner – 1.570 zł
promise – 98 zł
another decision, regulated by law- 10zł
letter of attorney – 17zł
issuing certification – 17zł
notaries - some percent from the property value

Maybe you can find some more help and infos here - en.polishproperty.eu/why-poland/legal-site

thanks for your reply. i do have all the these.


but I am not earning like the first commentor- earning 10k in Euros..

I was thinking that a flat might be available around 120-135k PLN.. but tough in Krakow.

hmmm are you sure you aren't mixing currencies there? 10 thousand Euros per month? Unless you're a football player you'll struggle making that even in London.

The average monthly salary in Poland is 2512 PLN net (3510 PLN gross). That's less than 600 Euros/month. You're honestly telling me a Bank in Poland is demanding 17x (!!) the net average wage in order to grant you (or someone else) a loan for a flat? Something's not right there.

And why would anyone taking home 120 thousand Euros (more than half a million zlotys) per annum need to get a loan for a flat in Krakow in the first place? o_O

You'd be surprised. There are people based in PL who get more than that.


That would depend on the mortgage broker, the mortgagee's personal circumstances and the length of the mortgage.


I can think of a few people who get mortgages for flats in PL with that sort of income. Some of us even choose to rent our home, often for tax purposes.

No. Banks in the EU are subject to regulation, this isn't the wild west. There is no way a Polish bank would demand anyone 17x the net average wage to approve a loan for flat in Krakow. Unless you have a criminal record in which case they could flat out refuse you a loan. You get that kind of demands from a loan shark, not a EU based bank.

The only thing I know for sure is that this whole discussion is scaring the op straight.