Poland's apartment prices continue to fall

Poland? Doesn't seem like it - banks aren't lending 100% LTV, but they're not in any trouble themselves.

Cyprus is believable - they have exposure to the Greeks.

Inwroclaw the answer to all your questions is no. Unemployment trends are negative and though the govt would like to cut interest rates it would have two bad effects - weakening bond sales thus increasing the deficit, and weakening the zloty.

You might get a cut to 4.25 but would be amazed if any lower in next 2 years

Is there really any reason to cut interest rates right now? People aren't suffering with PLN mortgage repayments, weakening the Zloty would hurt those with EUR/CHF mortgages - seems like there's no real reason to do it.

Does that not increase exports? Not that I approve of IR cuts and the inflationary risks that go with it.

Don't misunderstand me - I don't know much about the Polish economy and am the first to admit it. But, I think they manufacture and then export here. Any increase in manufacturing boosts jobs, doesn't it? Of course, imports rise in price when a currency weakens.

None of that has worried the UK - whose exports remain unimpressive despite currency devaluation and printing money, and IRs at 0.50% with talk of rates dropping to 0.25% in Q4. And don't get me started on their gilts.

euro/zloty 3.80 is seen as the floor level for Polish exporter/importers

"Exports will be profitable provided the euro/zloty exchange rate will stay above 3.80," Zygmunt Kostkiewicz, head of state-backed insurer KUKE"

blogs.wsj.com/emergingeurope/2011/04/27/strong-zloty-hurts-polish-exporters-data-show-otherwise

That's more or less where I could see Poland joining the Euro - perhaps 3.70 rather than 3.80, though.

Why would anyone want to join the euro? Instant inflation?

It would make many people's lives considerably easier. Anyone living within driving distance of Germany can see how the Zloty acts as a barrier in some respects - companies such as MediaMarkt are forced to charge higher prices in Poland than in Germany because they simply can't risk the currency swinging against them.

I know of one company that lost nearly 250k PLN in a year because of the Zloty moving against the EUR - the losses were entirely due to having to buy in EUR and sell in PLN.

As for inflation - experience shows (and as has been done in the countries that joined the Euro recently) that the best way to deal with that is to simply insist on dual pricing for a prolonged period - you still see prices in Slovakia in SKK and EUR.

The irony, delphy, is that the reason there's such a meltdown in the first place is the currency is all pegged to be the same. Having the same currency only works if you have absolutely no barriers between the places with that currency.

Suddenly greece, and every country, has to be 100% competitive with Germany or financially collapse. But most these countries are little better than third world countries to start with. To adjust things you'd have to relocate half the population of Greece around the whole EU, and same for Italy and Spain. Even then it would still be a mess for decades and only if large amounts of business starts to operate outside Northern EU will things ever settle down in a way that the rest of the members aren't completely impoverished.

But this can't happen because? Why, delphy? Because the currency is pegged to the same thing and there's no incentive. You can't pay people in Greek dollars and laugh your way to the bank any more. Now Greeks have to compete with Germans and Finns and Norwegians and the UK on a 100% level playing field. But guess what? They can't, and they never will be able to because those countries have both more resources per capita and they have much more effective workforces, more education, and they have all the infrastructure they need to do business. Italy is little better than North Africa.

So not only is it a stupid idea to constantly run in a deficit, which financial people only suggest is good because they make their money lending money to stupid people, but that's not even possible here. You see it has to balance out 100% now. It will balance 100% whether you want it to or not. Why? They are on the same currency. When you lower your currency people do business more and pick your stuff up on the cheap, and when you have a deficit this ultimately corrects itself regardless of what you want as they found out in the USA recently. You never hear about a trade deficit between states in the USA because it just doesn't happen, and it can't happen in Europe any more either.

But since half the countries in the EU are totally uncompetitive and this happened all at once it's almost impossible to adjust for, and to correct it the countries of Europe as we know them would have to simply stop existing in current form. No more Italians, no more Greek, no more Spaniards, they will all have to move to find jobs of any kind and welfare system won't work any more either (as much as it ever did).

TLDR European Union is going to utter destroy most of Europe before it completely falls apart

Its all about trade between countries. Tourism and cross border travel is a tiny part of the economic benefit.

Countries with very interlined economies - such as Poland and Germany - have very good reason to share a currency. The periphery such as Greece, Ireland, Spain and Italy should not be in the Euro.

But for Poland, Holland and even France its a no brainer.. Poland was part of Germany's infrastructure until 1945.


It impossible that every state has a 100% balance of trade with every other state, so thats a silly comment (unless you want to fool yourself that Alabama produces and exports the same as -say- New York or Californian?). The USA is, like the UK, a transfer union, money goes from poor states and regions and this is accepted.

The same transfer union has to exist in Europe.

till 1918

It's not such a bad idea for Ireland - they would have to peg to something, and the alternative (the Pound) was never really in their favour. At least with the Euro, they could act as the European headquarters for businesses and do all their accounting in the same currency as they sell in.

But yes, Greece and Spain certainly should never have been in it. Italy was borderline, but given how useless the Lira was as a currency...

About 2/3 of Ireland's trade is with the UK, until very recently they were using the GBP and then their version of it the Punt. It made absolutely no sense to use the Euro, except as a declaration of a fantasy relocation of Ireland into another continent. Nowadays Ireland's economy is even more integrated with the UK.

The idea that Ireland is a natural euro economy is ridiculous, it barely trades with Europe and everything has to travel via the mainland... mainland Britain, to the continent. Its nothing to do with politics, simply the undeniable location of Ireland as a island off the coast of Britain.

Ireland hasn’t pegged its currency to England’s since 1979. Ireland trades with Europe or has Britain left the EU.
Where is the mainland?

I have been monitoring prices of houses on the outskirts of Warsaw, there are more and more examples of sellers dropping their prices by as much as 25 - 30% and I believe they still have a way to go. Although I must add the reason behind the lower price offerings has more to do with sellers realizing they have been unrealistic with valuations. It beggar's belief to understand why sellers in Kabaty or Wilanow Zawady expect to achieve the same price per m2 as sellers in Zoliborz or the better parts of Mokotow.

I'll explain it again.
Most of Ireland's trade is in GBP not the Euro, joining the Euro was a political not economic decision, and a stupid one.


Selective blindness when it comes to the word and concept of Britain, eh?

Peterweg describing Britain as the 'mainland' in reference to the republic of Ireland is inaccurate and potentially offensive.

So the geographic fact that the British Isles include Ireland is offensive. Sorry, I'll try stop laughing.

The British Isles is a geographical term, yes, well done.
Nonetheless, describing Britain as 'the mainland' in reference to the ROI suggests a political relationship that does not exist.
Besides, in your previous post, you clearly stated 'Britain' not the British Isles.

It doesn't suggest any political relationship at all.

They do the same in London, parts of Kilburn became South Hampstead Village or something :o)))

I think the psyche of sellers in Poland is absolutely insane - probably caused by a very inexperienced market.

I already know that when the time comes to sell, if I can get the price I paid (adjusted for inflation) - I'll be happy.

Listen. Nobody gives a flying **** about it in England. You guys have been fighting over it for God knows how long and its the same trivia that matters to nobody else but yourselves and your puffed up egos.

This is a Polish forum, so please stick on topic.

Maybe we give a flying **** because it's "our" country; its a worldwide phenomena throughout human history, that natives give a **** about their country being occupied by imperialist. I'm sure if a Russian native told a Belorussian "You guys have been fighting over it for God knows how long and its the same trivia that matters to nobody else but yourselves and your puffed up egos"

their reply would be similar to what I made. Sure, the fighting has gone on for long enough and it's over forever, thankfully; but when some sh1t stirring little englander tries to make a not so subtle remark about what he thinks is the Irish "mainland" or tries to insinuate that the fighting was all in our heads and nothing to do with the fight for independence against an invading enemy; well then it's a duty to be defensive. "We" don care if you never gave a sh1t about what goes on in another country but don't deny that your country is 100% guilty for what happened. The war is over and no one won, so respect the silence.

And "YOU" stick to the topic.
Apartment prices are going down slowly but surely.

ha ha ha ha----still not a bubble!!

and nobody ever said they were not going down. But a slow decrease (slowly but surely, your words) is not a bubble.

well, the speed of the deflation is determined by the economic conditions. I hear there are more Poles heading to Canada,any idea how many visa's are being offered. Watch 1hr 47

rte.ie/player/pl/show/10062384

This may affect your calculations about property prices in Poland. Many people looking to Central Europe as a stable, safe haven from the troubles in the Southern countries.

I remember people on the forum using Berlin as an example of why Poland was supposedly in a property bubble.

spiegel.de/international/germany/real-estate-boom-threatens-to-end-dream-of-affordable-life-in-berlin-a-859420.html

The article is about Berlin NOT the C.E region, Berlin is a very unique case even when compared to the rest of Germany. One of my neighbors sold one of their properties in Warsaw, so they could buy something in Berlin. Rents are capped in Berlin so there is no free market. From reading the article you posted it reads ' Berlin safe heaven investing ' it reminds me of Barcelona in the nineties.

Perhaps you had better tell the newspaper not to print lies. If you read the artical it "states" that rents have been rising at 4% a year, its one of the reasons property in Berlin has become attractive.

It seems that a lot of people are unsure about the Euro.

I was born in the UK because my dad was made a stateless refugee by the Russians and allies. I don't give a **** about Irelands stupid squabbles coming from someone who is Polish/English and Irish catholic. I assure you the rest of the world cares even less about your ego.


The constant drumbeat of new jobs and economy growth will stop any crash happening. Still, the fall is and will be significant (25%+) over several years.

The only question is when prices will start rising again. This is entirely dependent of bank lending in Poland and banks are being forced to recapitalise. Couple of years to go in Poland, I'd guess.

BTW, REAS report is due out in a week.

residentialadvisors.eu