Poland's apartment prices continue to fall

:o) But on the whole, prices do not seem (as yet at least) to be doing very much (in Wroclaw). If it's going down, it's a gentle slide so far. I think it's safe to say at the moment they're certainly not rising. It is the summer and some would say wait until the autumn before getting any gauge out.

InWroc, any decrease in prices should be seen as an opportunity to buy location/quality which you would not normally afford, future liquidity is in location.

On the first day you buy, you become a seller so focus on your future exit strategy NOT entrance level.

If I buy it would be for myself and for long-term, eg 10 years or more. I split my time between the UK and Poland. Some of the areas I thought were better, eg Oporow, don't seem that good. The leafy streets and large houses and decent blocks still suffer from yobs walking through them boozing in the evenings, dodgy looking characters here and there, low flying aircraft noise several times an hour when I was walking about. Yet the prices, well sit down and have a brandy.

NBP chief said Zloty is weakening, causing inflation. That might mean they won't cut interest rates as a cut further weakens usually.

thenews.pl/1/12/Artykul/106981,Finance-crisis-has-hit-Polish-exports-and-currency-says-central-bank-president

Of course I could be wrong!

REAS survey is updated.
media.reas.pl/file/mediakit/424815/74/reas-residential-market-in-poland-q2-2012.pdf

if anything the Polish market is exiting a " price-wage spiral.” and entering a " cost - push " period.

Long article at Reuters about the now well-known debate on whether gardens in Warsaw etc should be sold to developers.

Article says
In the years since the Berlin Wall fell, Poland has embraced the market so enthusiastically that it is now more capitalist than some countries in western Europe.

It worked. Poland's economy has grown uninterrupted since 1992, and last year was still growing at 4.3 percent, even while growth slumped in the rest of the European Union.

and
Twenty years of economic growth have left real estate developers with a dwindling supply of prime sites where they can profitably build.

If this is so, then property prices might not fall much more where there is such a level of demand. Obviously! Although fairly hard to see demand if Poland suffers a slump. The article suggests Poland is growing, not slumping, however, if it has its facts straight.

But on the other hand, the article suggests it may be offices or shops the developers want to build, not apartments:
"They (businessmen) want to build supermarkets and malls here. It is about money and nothing else.

More: uk.reuters.com/article/2012/08/03/uk-poland-allotments-idUKLNE87201220120803

I cannot imagine this happening. One of the very few assets of Warsaw compared to other European capitals is that it has a lot of greenery.. If that is sold off to developers and disappears, life in the capital will become really debilitating..

I do like the idea of building on allotments "because green areas are good for residents".

But Warsaw is nowhere near running out of space for residential accommodation. There are still enormous sites to fill in (behind Kasprzaka, along Grzybowska and Siedmiogrodzka for example) which are far closer to the precious Centre than Rakowiec is.

those allotments, however, are an eye sore. They look like a broken down trailer park. If there were some guidelines- it would do a lot to improve the look.

blogs.ft.com/beyond-brics/2012/08/08/cee-property-getting-worse

They could start by checking to make sure that no-one is living there permanently.

I also notice that many of the people protesting fail to mention that they only acquired the allotments as a result of being loyal Party members.

European Union funds played a key role in strong public investments, in addition to the large internal market of 38 million consumers and a weakening of the zloty currency, which helped Polish products become more competitive.

There is also a significant fiscal consolidation, which is expected to bring down Warsaw's general government deficit to 2.9 percent of GDP from 5.1 percent in 2011, limiting public spending. All in all growth will slow down further in 2013 as the reins are tightened.

Perhaps.

"Two months ago, I would never have said we would be where we are today. There is no logical justification for the złoty's appreciation just as there is no justification for the fact that other emerging markets like Mexico, South Africa and Turkey have also seen huge foreign capital in-flows and an appreciation of their currency in recent days," said Przemysław Kwiecień, chief economist at X-Trade Brokers.

wbj.pl/article-60031-zloty-appreciation-illogical.html

Looking at it quarterly can be misleading as a relatively small number of transactions make up a significant amount of annual volume. Additionally it could be noted that Q1 2012 was 21% higher than Q1 2011. Also at the time they reported this, there was already at least one large transaction I'm aware of for Q3 2012 (see below). I would expect 2012 should be similar to 2011. There are a lot of large value properties under discussion currently; of course they could sell after 1/1/2013 instead of before 31/12/2012, but I predict Q2 2012 is in no way representative of future quarters.

"pbb Deutsche Pfandbriefbank has provided a €65.45 million senior facility to Hines Global REIT for the acquisition of a prime logistics portfolio in Poland. The transaction closed on July 24, 2012. pbb is acting as arranger, sole lender and hedge provider of this financing transaction."

Well, Mr Kwiecien is wrong , there are logical justifications. When you consider that:

(i) in 2011, over 60% of all US debt was bought by the Fed (vs close to zero before 2008) thus reducing sustantially the volumes available for other investors

(ii) Germany, Austria and even... France are borrowing at negative interest rates for short maturities
(iii) the SNB is buying like crazy top quality euro denominated paper in its bid to keep the lid on the appreciation of the CHF

it shows that there are fewer and fewer places availables for investors to invest their liquidity if they still want acceptable credit risk. It seems logical that the PLN, with the underlying polish economy doing quite well at least compared to other countries benefits from it. Of course, as soon as the next stage of the euro crisis strikes and risk aversion return, investors will start selling again..

The Polish zloty has followed a strengthening path vis-à-vis the euro since early June, largely as a result of the ongoing euro area crisis which has weakened the euro against most currencies. It can be expected the currency will level off again in late September/October. The PLN historically appreciates against the Euro/USD/GBP over the summer months to coincide with the holiday period.

wroclaw.gazeta.pl/wroclaw/1,36743,12313765,Ile_jest_Krzykow_w_Krzykach__czyli_sztuczki_deweloperow.html

The above seems to be an article in Polish about how developers are saying their plots are in a sought-after area, when as the reality may be that they are not in that area exactly or at all - allegedly!

More interestingly than that, which will make a lot of you say NSS at me, is that they seem to be saying Wroc has 2 years of unsold flats available.

Now, I don't speak Polish, so I'm not sure the translation was correct, but it seems to be saying that.

If it is, we may get proper discounts soon.

you can be sure that down is the only direction for the next 2-3 years.

And you can be sure that Polish appartment prices have continued to fall for the last 47 pages of this thread at which page we are now.

I think I'm right in saying they are down on what was being asked when I was here in 2010, just not enough to tempt me.

[quote=InWroclaw]I think I'm right in saying they are down on what was being asked when I was here in 2010, just not enough to tempt me.

you are right.

But we just have some next 47 pages ahead of us. Then, at page 94, you will tell us if it is "enough" ;-)

Well it is a discussion forum, that's the whole point of it - discussion and revenue from (ads? and) premium memberships. You may call it repetitive or boring in which case just don't read it and enjoy the threads which have more appeal. Easily solved case. Next!

I think you've misread my point. By saying "enough", I didn't mean the number of pages and prospective pages in the thread. I just meant that you would tell us if


the slump in Polish apartment prices that is supposed to be registered at page 94 would be "enough" to tempt to you into buying property in Poland! Next page, please!

I applaud this statement.

You applaud it in the same way as Harry did applaud one of yours:



Milky, not that you repeat all the time the same boring little statements that one day property prices will come down, you have just started to repeat things after Harry!

Thanks, fwiw I was in a fairly well-to-do area of Wroc earlier today (Biskupin). There are 4 or 5 very large noticeboards outside the shop at the tram loop around. I estimate more than half of the notices and home made ads stuck there is were properties for sale. Two of the boards are jammed and people have stuck fresh ads over some of the neighbouring ads. This suggests the higher end of property might be under pressure right now. Perhaps a Biskupin local could say whether there are usually so many hand bills and ads with properties for sale on those noticeboards? Where I am (nr Skytower), far fewer such ads (near Skytower is a cheaper but not cheap part of the city). Unfortunately for me - there were very few ads offering flats to rent, most were for sale. They did not put the prices on most of the ads!

in.reuters.com/article/2012/08/16/poland-gtc-idINL6E8JG5HA20120816

Warsaw-listed real estate developer GTC plans to scale back its presence in less-stable markets in central and southeast Europe and focus instead on investments in Poland, it said on Thursday.

"Times are tough, very tough, and we are readying ourselves for such a difficult situation for the next one or two years," GTC Chairman Alain Ickovics told a press conference.

GTC said it was in talks over the sale of several projects, primarily outside Poland, to raise cash for new investments. Its plan assumes raising 180 million euros from asset disposals by the end of 2014

[quote=peterweg]The report notes:


Commercial real estate transactions to increase in 2012
The value of transactions on the Polish commercial real estate market will exceed €1billion in the second half of the year, compared to €856 million in the first half of the

year, analysts forecast. This will rank Poland first in Central and Eastern Europe.According to forecasts published on Monday by consulting firm Savills, the value of

transactions on the commercial real estate market will reach between €2 and 2.5 billion and will be comparable to 2011.
Parkiet, Aug.21, p.10, KA

Because that's really the only ad board in Biskupin. The second area is around the second tram stop, a lot of adverts are put up next to the post office and the nearby Spolem. Also the majority of folk that live here are elderly, so the internet is unheard of and any real estate agent is looked on with suspicion.