Yes, it does not matter if its Cuba or Korea. If a free market is allowed, then people will always try to obtain the highest price for what they want to sell. The comparison I made was that in Poland, which has a relatively new real estate market, prices escalated to the extent that to buy a property involves prices which in multiples are many times the average wage.The reason given for this by a few of the posts on here have been due to foreigners/investors pushing up the prices. I was merely pointing out that the Cuban's are now being allowed to sell property for the first time in 60 years and are asking for far higher amounts that the indigenous people earn.
I am not comparing the markets as you suggested, just making a comment on human nature. If you did not understand the post, ask for clarification. If the statement strikes you as untrue then provide an argument for your views.
Well I suppose it was a bit of a stupid statement. But there is no gun to people head,they don't have to follow the thread,,and! if you(w) don't care about the prices of housing why look at the thread in the first place.
Anyhow,results for the first quarter are quite clear.
yesterday I was in Miasteczko Wilanow. They are advertising for 5500 for a square metre. I think it will go to about 4800. It did start at 7500 per m2. This is the market leveling out. no bubble.
In my book, dropping from 7500 to 5500 is certainly a symptom of a bubble, I don't know what else you'd call it. If a fall to 4800 is not the aftermath of a bubble, perhaps you should've had a browse round Dublin and heard the "no bubble" suits talking there in '07
If genuinely a "market value" reduction, 7500 to 4800 would be something like a 35% deflation
Now, I am not sure what discounts Polish developers give when you offer to buy their apartments - so it could be that the drop is not really as much as 35% if they would have agreed to 7000 m2 or less anyway - but it is still quite a reduction, question only being how much further will prices correct if they do continue downwards
By the old fashioned measure, in some locales prices seem about double what they should be as this UK market housing charity video suggests youtube.com/watch?v=9rfmKYSgsH8&feature=player_embedded
but you can't compare Ireland with Poland- or Poland with any other country for that matter. Primarily the prices were inflated and now that the market is saturated the prices are starting to level out. 4800 is not a crash price. Some of the developers that are selling single family houses are giving a car with the purchase.--but houses for 2.5 million are still selling.
I think it is fair to say that Poland does its own thing- with the non recession it is experiencing and now the no bubble.
Primarily the prices were inflated and now that the market is saturated the prices are starting to level out. 4800 is not a crash price
If you told someone that a house for sale in NJ US$70,000 had fallen to an asking price of US$48,000 but that it was not a crash, just a levelling out, they would assume you were doing stand-up in Atlantic City
but I would never say that! The US economy is not the same as Poland at all. Why is it so hard to believe that if Poland didn't get hit by the recession....they may not experience a bubble. Tell me why!!
A better example is Canada. The didn't get hit hard either. There is recession (mostly in manufacturing) but it hasn't hit residential at all- this is because Canada has really strict banking rules so not everybody can get a mortgage like how it was in the U.S. I have a few friends who are agents in Ontario and B.C. and they are really doing well.--Like nothing ever happened- sales are consistent as if there was no recession.
One sure sign of a bubble is people saying this time the normal rules don't apply.
exactly heard that soooooooooooooooo many time in Ireland. with some it's just plain stupidity and with others 'spin'. Ireland is different with all its ghost estates, but at least wages tripled in Ireland;in Poland the bubble wasn't even based on Polish wages.(sorry for making this point a 100 times)Entirely driven by the billions flooding in from abroad .
As to whether 4800 is a crash price is open to debate, but it would certainly be the end of the boom and would mean we were more or less back to inflation adjusted pre 2004 figures.
As an example I bought my first property in Poland in 2001 for 3000 per sqm which was going rate at the time as I looked at about 7 or 8 places. I bought without credit and at the time I thought it was a reasonable price and in cash flow terms it has just finished paying off over an 11 year term (would have been a bit quicker if it wasnt for a few bad tenants).
Compound inflation at that time has been 42% - so essentially house prices will have increased 14% in real terms. Not a bad return and certainly better than a lot of my stocks over the same grim period, but not an earth shattering piece of business, especially in an emerging market.
You should be happy!!!!. In another 6 years a developer will be paying you to take a free flat' Then you can stop whinging and provide for your family. Problem solved.
I just wanted to give a little insight into the Warsaw market. Warsaw has a population of 3 million-plus or minus a few. For a city this size it should have over twice the office space it currently has- this is based on a country with 38 million people and Warsaw being the capitol.
So there is construction happening constantly. Most of the owners of these buildings are German. Most of the companies leasing this space are from other western European countries. Germans and others can set up shop in Warsaw with highly trained, educated and knowledgeable Polish staff- which saves the company money. So with all of these companies setting up shop here and hiring- people are still buying residential properties...therefore no bubble. But...because the market is saturated the prices are dropping and leveling out.
As well, there is spill over into smaller markets such as Wroclaw, Tricity and Krakow. Companies are setting up there as well. So- actually- western Europe is fueling the current situation in Poland- being no recession and no bubble because it is cheaper to do business here rather than in their own countries.
For example- the phenom known as a call centre. There are loads of companies setting shop in Poland because they are closer than the Indian call centres and the workers speak better English.
Another thing is that these people do not save their money. Polish people are living from paycheck to paycheck---not with major debts like the Americans --so Poles haven't hit rock bottom yet.
As well, there is spill over into smaller markets such as Wroclaw, Tricity and Krakow. Companies are setting up there as well. So- actually- western Europe is fueling the current situation in Poland- being no recession and no bubble because it is cheaper to do business here rather than in their own countries.
You are mixing up commercial property with residential, I thought this thread was about residential?
You are mixing up commercial property with residential, I thought this thread was about residential?
no I am not. My point is that there is all this commercial space available to be leased- there are companies leasing the space and hiring people. these people being hired are buying residential properties. The jobs available are white collar- meaning the salary is higher---so they have more disposable income and want new things- being flats and houses--this is one of the reasons why the residential market won't tank.
I think that's a silly remark about Indian call centres, and anyway the thread's about residential property - apartments in particular.
why? I am not making any racist statement. What I am saying is that companies are setting up their call centres in Poland because they are closer to the originating company and the workers speak better English--they are easier to understand that English that is spoken with an Indian accent.---what is so silly about that? please don't accuse me of anything racist- I am far from it.
Is a new law coming in shortly adding greater security to the deposits potential buyers have when purchasing off-plan apartments? What security is there for deposits currently?
If I see prices continue to fall I will dip my toe in, want to be prepared
In case of a bank-financed ( 99% ) projects none whatsoever, because the moment a given developer applies for bankruptcy all the creditors are divided into groups and creditors with a mortgage in place receive their $ before anyone without a mortgage gets to wet their beak.
So the bank usually gets their money back, assuming there is anything to finish/sale, and whatever is left is divided between the people who made deposits.
The very reason why the new law is coming into effect.
So what does the new law say, in basic terms? I am not sure.
In basic terms there are a number of options introduced for anyone wanting to carry out a development project in Poland, selecting one of which is obligatory. Most developers will highly likely choose the depository account option, in which an account for payments from investors is established and remains untouched in case of bankruptcy. There's also a push for greater transparency in terms of where the money comes from and who the developers are.
I'd have to look into the particulars because I'm not looking to finance anything new in Poland at the moment so I kind of stayed a bit behind on this one, as far as I know there was a big row ( usual ) in the Polish Parliament when one of the top boys from Platforma Obywatelska supposedly tried to introduce last minute changes to the draft.
No problem, be sure to double check the actual text of what the Polish Parliament passes ( sejm.gov.pl ) because they do have a penchant for changing bill drafts like crazy in Poland. It might be an elephant when it is submitted, but when the Polish "Sejm" and "Senat" are over and done with their modifications it might already be a mouse.
At the end of 2011, bankers feared that sales of mortgages would fall by up to 15 percent at the beginning of this year. This is because most banks stopped lending mortgages denominated in foreign currencies, while further limits were put on the government's Family on its Own mortgage-subsidy program and the regulator tightened lending rules.
But expectations of a drastic drop have proved to be exaggerated. Sales did contract, but not by as much as forecast.
In January, banks lent zł.2.02 billion, the lowest amount in 12 months, but the year-on-year fall was not even as large as 10 percent, Puls Biznesu reported.
