Poland's apartment prices continue to fall

There are between 5 and 7 ad boards that I saw at Biskupin, 4 at the tram loop.
Here near Skytower there are no actual ad boards that I am aware of for quite a radius. I saw a man with a clipboard tearing home made ads off a bus shelter today but he didn't look like an official. The ads were for transport and English lessons. Very few property ads here - perhaps they do use the web more here for their ads, as you suggest.

Poland's apartment prices keep falling

Poland's apartment prices can fall by a further 5-6% by the end of the year, the daily Rzeczpospolita writes citing real estate market analyst Jaroslaw Jedrzynski.

By the time the market reaches its trough in H2 2013 or the turn of 2013/2014, prices may fall by up to 20%, the expert says.

Returning to the prices from before the apartment boom in 2006 is, however, not possible, Katarzyna Kuniewicz from Reas consulting adds.

"All truth passes through three stages: First, it is ridiculed; Second, it is violently opposed; and Third, it is accepted as self-evident."
-- Schopenhauer

Now, it's actually nicer that you repeat after Schopenhauer than that you repeat after Harry.

Still, your own predictions for a property price slump in Poland are very, very, very far from being "accepted as self-evident".

Brief article today about prices at what appear to be newsworthy lower levels in Wrocław and a part of Krakow. Of course only certain neighborhoods are at that price currently (4000zl / m2).

No, Maybe late 2006 prices

What is the difference in price between now and 2006?

ober-haus.pl/files/pl/files/en/reports/actual/Ober-Haus%20Polish%20Cities%20Apartment%20Price%20Index%20July%202012.pdf
warsawvoice.pl/WVpage/pages/article.php/21310/news

Reminds me of another great quote:
"Prices will go down +20% this year, is my bet."
--milky

Only another eight weeks to go and then you can finally shut the fck up.

so maybe part two will show higher drop, so no need to shut u p yet mr anger issues
as you said HARRY
"No major city is going to see falls in all price per sq. metre and size bands.From what I'm seeing and hearing, prices out there are very stable or actually going up"

Which has been proved to be 100% wrong.

I wonder why you haven't linked to the post in which I supposedly said that? Could it be because you are lying about me saying that? Yep, that would explain it.

The real posts were:
"No major city is going to see falls in all price per sq. metre and size bands. Most will see falls in some band and rises in others. A select few will see rises in almost all bands, perhaps even in all. However, I have very little idea which will be which or where."

and
"From what I'm seeing and hearing, prices out there [Białołęka] are very stable or actually going up (in large part because city centre and outer centre stuff has become unaffordable for many people)."

Now that we've seen your lies about what I said, perhaps you'd like to give us some sources which show a major city seeing falls since October 2011 in all price per sq. metre and size bands and/or sources which show that prices in Białołęka in October 2011 were falling? Or shall we assume that you're being as truthful with those claims as you were with your claims about what Polish TV news predicting a 30% fall in property prices (it actually said no such thing, lie exposed here) and about the average Polish wage (strangely the real figure is more than 30% higher than what milky claimed, lie exposed here?

Bit short of time today so cannot double check the translation, but if I read it right then ...

abandoned residential developments in Wrocław - the sites have been abandoned, and the buyers are left out of pocket so far

wroclaw.gazeta.pl/wroclaw/1,36743,12387612,Klopoty_dewelopera__ Nie_buduje__ludzie_bez_pieniedzy.html

However, not sure exactly why this is unless people are turning to renting - because Wroc seems a lot busier this summer than last. They're not all tourists! Seems more people have moved to the city from villages or towns. Just try to walk along Krzyki and see how many people are around, rushing here and there, on bicycles and on foot, in cars and on the trams etc. Busier than last August for sure. The population is either swelling or they've forgotten to go home after Euro 2012...

Hi all - I've been following the forums a lot but I've been a way for a few months, but recently I've gotten keen again on the idea of living in Warsaw. Are you able to get a decent sense of apartment prices and the market by scanning a few websites? I've looked at gumtree.pl, trovit.pl and tabelaofert.pl quite a lot - has anyone got a recommendation?

Honestly, in Poland, the best thing to do is to look around, get an idea for the price per square metre on average, then knock off 10-15% off that price. There's a tendency to overprice property on advertisements - and almost all of them will be "for negotiation".

Don't be afraid to give someone an offer - give them 24 hours, tell them it's non-negotiable and don't be afraid to walk away. Very often, they'll have some fixed idea of the price - and will be happy to sit on the property for months rather than sell it a bit cheaper. So - don't waste your time, just name your price and let them decide.

Thanks - good advice into the mentality of sellers. The reason I'm asking about websites is I'm going to be in Poland for a couple of months in about 9 months and I want to have narrowed down to what we want - currently thinking Warsaw, reasonably central (Wola/Mokotow), 3 rooms / around 70 metres.

It's good advice from delph. The more expensive or individual the property the bigger discount you can try and get, I have just got 28 percent off the asking price for a place. That will be difficult to achieve in wola or mokotow but 15-20 percent is possible provided you have got your funding in place and are ready to execute.

Be careful of deep discounts on new developments and check that the infrastructure is in place - otherwise you might end up the only tenant in a half finished apartment block, with the developer having gone to the wall long ago. This can be the case even in good locations - I drove past a very well located development in Poznan last week and saw maybe 2 out of 100 apartments looking occupied.

If you get a cut price of say 15 percent and then spend months messing around with a bank then the seller will probably do a deal with someone in the meantime, so make sure you already know what kind of mortgage you would want etc.

@cms - where was that and what did you pay per metre? I've heard the average for Warsaw is 8000/m - I'm wondering whether that is finished or unfinished, and how far that is off more desirable locations.

I'd be looking to be a cash buyer by further leveraging my existing mortgage (outside of poland). I'm probably not so keen on buying a place that hasn't been built yet - is that where you got your discount?

An average is a misleading number in real estate.

In Miasteczko Wilanow- the price is about 5000 m2--some even less, down to 4,600m2. In Piaseczno it is less than this.
Sady Zoliborz is close to about 7000m2. On the Praga side- apartments are far cheaper.--Old Praga is beautiful, original and gets a bad rap so the prices are cheaper.

Closer to centrum, like Powisle- new construction is over 10,000m2.

This is shell and core- no fit out.

There are loads of flats being built in Warsaw- just depends what you are looking for. As for discounts....hit or miss.

@pip im looking for 2 bedrooms livingroom bathroom walking distance to metro or on a tramline and within about 5 kms of the centre - nice neighborhood, some parks and trees. and probably 8000m once cost of tasteful but not flash fitout is included (or secondary market)

I would be very careful with new developments full stop - I just cannot see how the numbers work for some of them without making huge compromises in build quality. My friend rented a new build a couple of years ago, and within 3 months, big cracks had started to appear in the walls!


I can recommend ING if the financing isn't an issue - my mortgage was sorted out within 8 days from application to approval!

Yes, that would be my worry in some cases now too. I would not say every development had succumbed to that, but I would certainly think harder than before. Problem is, can anyone tell before purchase unless they are very expert indeed? You would surely need to see what materials went in and what's hidden in the structure. I certainly would not have the knowledge for that. I might be able to spot something already starting to show signs of a fault but not be able to otherwise look at a building and spot what was omitted (unles very obvious!) and could cause subsidence or cracking etc.

Have a look at Ursynow. I really like this part of Warsaw. It was meant to a be a model development during the big communist build after the war. But after communism fell- this part got a lot of new development- it has proper roads that are two lanes, loads of new builds, large grocery stores but also smaller more personal stores and then the open air markets.

It is also close to Kabaty forest- Poles go crazy for the forest...

It has really nice new buildings, lots of great parks and bike paths everywhere. The old post war blocks don't stick out- they all have had facelifts. That would be my recommendation, for sure.

Its about 70k from warsaw, and its a house not a flat. What you are looking for is a far more liquid market hence you should probably aim more for the 15-20 percent discount. If you have 5 places on your shortlist then one of them will go for it.

What people say about the polish mentality is only applicable up to a point,normally when the bank starts pressing them to repay their credit.

That`s good, isn`t it?

One of the biggest residential developers looks like it is in serous trouble , according to today's GW. Gant has circa 450 m zloty of debt that it has to renegotiate.

For those who think prices can not fall to 2004 levels should note that gant share price (theoretically the sum of all future profits) is at 2005 levels.

What kind of reasoning leads you to link the share price of Gant in 2005 to 2004 real estate prices??

An interesting question for you - when I was looking for a flat, one of the (as per usual) rubbish estate agents told me that we couldn't negotiate the price on one place because - I quote - "she's in trouble with the bank". Would the banks not want to get as much a a return as possible on the property, rather than having to repossess it?

And yes, I agree - I think that mentality is more often seen when there are multiple owners, or the owner has recently inherited it. I made a distinct point of not even looking at properties with multiple owners (unless it was a couple) - far too much hassle and unrealistic expectations as to price.


But isn't that a direct cause of too much debt rather than anything to do with the selling price of property?

I explained my reasoning. Share prices in theory represent the discounted sum of a companys future cash flows ( google it if you don't beliieve me) . Of course these earnings are not known so the prices are the best estimates. What buyers of the shares at e moment are saying is that the anticipated future earnings are the same as they were in 2005. Yes I was being a bit Tongue in cheek and the debt is a huge factor.

Delph generally the banks don't like to manage distressed assets themselves - it consumes manpower and legal fees. So you are correct t- it's a bit of a vicous circle though, if the bank saw lots of flats being sold below list price in a big development they might get very stressed and start to enforce covenants or even trigger bankruptcy - all depends where the bank stands in the pecking order of creditors. You can negotiate the price of any asset and you are probably experienced enough now to do that.

Yes, there may be correlation, no this statement is not a true statement.

Dom Development is trading above the 2008 (crisis) levels whereas Gant is trading below the 2008 levels. Gants stock price is a comment on Gant. If Gant and other developers go out of business, I think the effect will likely be a stall or increase in prices. Don't get me wrong, I am a bear on real estate, but as a person involved in the valuation of companies I can't imagine the spreadsheet that would reflect the valuation of Gant and a fall to 2004 prices (I expect Gant and all developers would have a theoretic negative valuation if we assumed 2004 apartment prices, although someone would likely always pay a few grosze for the shares).

So you think the banks are going to allow house prices to fall to 2004 levels and leave everyone who bought after 2005 in negative equity, thus leaving the banks owed huge property debts that will mean they are even more under capitalised than they are now and taking huge losses on mortgage repayments, forcing the governments to cough up even more taxpayers money to keep the banks from going under.

For Poland, this would be the same scenario as Spain, where, if the banks were to release a flood of repossessed property onto the market, this would depress the prices further and deplete the banks balance sheets even more. Maybe this is why Spanish banks require 100,000,000 Euros plus from the ECB at the moment. Of course, Poland does not have the excessive amount of property or debts of the Spanish banks yet.

Is there any Polish website, like the UK Nethouseprices website, that shows how much a particular residential property sold for in 2005?

EG "Ul. Skarbowcow 200C, sold 0203/2005 120000PLN, sold 04/10/2011 195000PLN, sold 12/10/2012 170000PLN"

This would allow potential buyers to comparisons between then and now - for whatever reason. Must be a website that does that!!

I think that this is what you are hoping to find but I am not sure that this history of prices exists in Poland:-

25 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5ST
Terraced, Freehold, Not New Build

£160,000..............22-Mar-2012

12 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build
£181,000.............15-Nov-2010

38 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build

£170,000..............01-Oct-2010

35 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5ST
Detached, Freehold, Not New Build

£182,000.............06-Sep-2010

10 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build

£143,000.............19-Sep-2008

33 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5ST
Semi-Detached, Freehold, Not New Build

£150,000..............02-Apr-2007

4 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build

£179,950.............16-Feb-2007

8 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build

£182,500............08-Dec-2006

23 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build

£163,500...........02-May-2006

12 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build

£180,000............14-Feb-2006

19 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5SP
Terraced, Freehold, Not New Build

£177,000............19-Jan-2006

33 Clarence Road, Staple Hill, Bristol, South Gloucestershire, BS16 5ST
Semi-Detached, Freehold, Not New Build

£129,995.............28-Jun-2005

This is a street that I know well in my home city. Small Victorian terraced houses. It's amazing that there have been none of the 20-30% falls in price that seem to be proclaimed by the media. Any fluctuations are possibly caused by the condition of the property and how well it has been looked after. The interesting one is number 10, this was bought after the financial crash and has appreciated considerably in value since. Again, a good indication of supply and demand, coupled with a good location.

Yes, thanks for posting that example, Avalon. Perhaps if anyone knows of a similar site, they could point to it.