Poland's apartment prices continue to fall

Do you not see what you've just done?
This is what I specifically mentioned you have done in your posts, you denied doing it and in the very same post did exactly what you deny doing.



It's not that I think you're wrong, you may be right I am only reading information but if you've got stats or numbers or any kind of evidence to back what you say then why not support what you're saying with it? All you're doing is saying that your husband says so and therefore it is. Well why not teach all those lowly English teachers living in their poor little secondary market a thing or two and come up with something a bit better than "[my husband] is privy to [secret] information." Do you see how that might not be entirely convincing?

whatever. I don't give a feck.

I have never worded "you have to believe me because my husband says so" as opposed to "my husband works in the industry and it is his experience that..."

take it whatever way you like. I don't give a rat's.

And it doesn't matter how much I post, which if you go back and see, I actually have posted info which got slammed because it is written by a real estate agency, there are those that will never accept the information based on one theory or another and that is fine.

I think it's worth pointing out that those of us living in Poland aren't looking at it from the eyes of a foreigner, but as a native. Unless they have a EUR/CHF mortgage, that is.

For me, the currency dropping is meaningless - I earn in PLN and have a mortgage in PLN - so the exchange rate is quite meaningless - the only thing that matters is "can I sell for more than I bought for?". The answer right now is "no", but I'd estimate my 'loss' to be no more than 5%. Which is fine.

I can only bring my short experience of the market since i bought on Rynek in Wroclaw last year and i have advertised here also :)

the rental market seems as dead as my grandmother.
As for the selling market, well, i sold three apartments in paris france those last 10 years and the best profit i made (100%) was the first one. Since then, i made 20% and 10% profit and the current market in Paris is gloomy to say the least. My sister wants to sell her 55 sqm near the eiffel tower and she struggles to meet her price...

You can't fight city hall AND real estate market. What i learned in poland is that it's still a poor country with limited opportunities in business and in real estate for sure.

We are currently facing the most violent and unknown crisis ever experienced.
As far as i'm concerned, the only things that matter in real estate is location, location and location. I have the best view in wroclaw and this is unpriced. Now, i don't have mortgage so i can afford to only wait and see. This passive attitude is bearable because i really like my apartment and its atmosphere but i can figure on the angony of someone who bought at the peak something remote from the center. This is also something very particular to Poland. Outside inner center, there is almost nothing. Everything goes on around a a couple of streets in the center while you have different districts in Paris or London.

Enough said, yes the whole real estate market sucks in Poland but thanks to globalization we all share the same burden from Madrid to Kharkov.

Quite normal for the extreme city centres in Poland - those properties always have been relatively hard to rent because they simply aren't desirable due to the noise. You'll find it's the same with commercial property - they are hard to rent in those places.


Limited opportunities?

First thing, have you seen the boom in the price of farmland? Secondly, how can it be limited in a market of 38 million people with strong domestic demand? Of course - you don't speak the language - so you probably don't realise much of what is possible.


It's not a bad rule, but in the case of Poland, it doesn't always work like that. There's a reason why Nowy Swiat is more desirable than the Rynek in Warsaw, for instance.


Depends. It's probably worth saying that there's not much in the way of nightlife outside of the centre, but to say that it's dead is inaccurate.

business oppotunities : i have my company here and i have enough experiences with the final customer to say that, yes, poland have been catching up those last ten years with west european eco but now i feel that poland have reached a brick wall. But other east european eco are facing the same reality. 38 M people seemed to me quite appealing at first but when 90% of the 38 M are counting every zloty before making any final decision of purchasing that narrow quite a bit the potential.

Poland has been cited as the most dynamic eco by several economists but for me it's just related to catching up. It's just talk to favor poland joining the euro zone. If it happens (but my bet it that the euro zone would split apart before), poland will really feel the pain. What sustains the eco of this country is mostly manpower coupled with the zloty.

Even if the salaries have gone up, the fees and prices of some services are getting even more expensive than in east europe. I pay 30% more for my mobile subscription than in France... This is a long debate but i have decided to skip the retail market here and focus on importing goods from poland in west europe because it all comes down to it.

I will never sell my apartment to polish people i know that for fact. Neither rent it. It's the type of 'falling in love' purchasing like the one i made. I walked in every part of wroclaw and i wish someone could show me something close to a dynamic district outside Rynek. Polish cities have not been built like this and there is now way and money that it would change. But again, i lived in Paris all my life so no way to compare...

With a double windows you don't mind the noise. I would be much more sensitive to steps stamping above me. And talking about nowe swiat and noise...

Real estate is like movies, every one has an opinion. You just need to find the one who share the same.

Poland hasn't been reaching a brick wall - it's still growing when other countries have indeed hit that wall. The amount of new investment is still coming in, and Poland is about to boom on the back of the great deal done with the EU budget.

If you can't find a market among 3.8 million, then...


Poland joining the Euro doesn't have to be painful, as it will reduce currency exchange risks. The only question is what level it will enter at - importers/exports are struggling to find common ground on this. As for what sustains Poland, you are aware of the huge exports of agricultural products and consumer products, right?


You pay more for your mobile subscription because much of the infrastructure had to be created quickly from scratch, it wasn't like in Western Europe where they had time to build these networks slowly. Getting into retail in Poland doesn't make any sense these days because the market is saturated - just ask all those foreign supermarket chains that have pulled out!


Nope, not a chance. Poles don't want to live in old buildings in the exact centre of town, not least because of the infamous 'pathology' that lives there.

Actually in recent years it hasn't been even "catching up" and it's not going to change.

So patriotic, aren't you?

In fact, in recent years, we've seen the gap narrow as Western countries fail to grow and Poland continues to do so. The fact that you and your buddies want Poland to die painfully is neither here nor there.

So you think it's "patriotic" to deny the obvious problems ?


"Growth" is barely positive at the moment and there's no sign that it's going to change. I'm not going to waste x hours on pointless "discussions" with your propaganda, just cite 3 serious economists saying that Polish economy is in good situation or shut up.

Info from a Polish acquaintance in Wroc last week: "We had over 300 applications for a job in our accounts dept."

If that story is true and not an isolated freak stat, it doesn't look too good to me, either. That said, the shopping malls are very busy.

Nothing new in most of the country, just start reaching the major agglomerations.

keep posting on this thread please.
I like how you provide evidence or observation for your opinions on the economy here and throughout the eurozone.

I agree, and you should nt since you only have to think about absolute prices.

The reason why this thing is a rather important factor is:
1) Local investor that wanted to lower there capital cost by taking the loan in Euro, or CHF, has had a very big cost by doing this. As long as they don't sell they don't see this (this also show how bad and inexperienced the Polish bank system are).

Local investors that have not done this and have taken there loan in local currency have had a much higher capital cost then average investors in other countries. The capital cost I would estimate has been on a average of 7-8% during the last five years for them. (very rough estimate, please correct me if I am wrong)

So what i point out here is that investors in polish reel estate market since 2006, must either: Lost a lot of money by the currency change, or have had a very high cost on its capital. (its called alternative cost if you don't need to take a credit, and it doesn't matter for the conclusion)

2) The international investors are not a very big part of the polish market. But that is actually not so important. The important thing here is that they invest in these project that is getting media. And when these investors is "fighting" for the best objects the liquids in the market goes up, and prices of a very small part of the market also goes up.

This result again to a change in expectations in the "normal polish investor" and also for the developers. Many (to many) projects will get started on false hopes since this is speculation and not based on real economic factors.

So again. The international investor dos not play a big part in the polish market, but back in the days in changed more of the market then its relatively small proportion of the market should let them do.

And as a last point:
28.06.2008: you got 1,97 zloty per CHF
20.05.2013: You got 3,30 zloty per CHF.

If you took a loan in CHF on the first date, for let say 100.000 CHF, you could buy a apartment with a value of 197.000 pln.

Let say you have to sell this apartment to day, with a 25% discount and then you want to pay back your loan?

You will sell it for 147.750 zloty.

I don't think the bank man will be very happy when you are coming with this 147.750 pln (equal 44.772 CHF to day) and you want to get rid of your loan that is twice as big as the amount of money you bring!!!

If you have lost only 5%, that is very good. But there are some other that has lost more!

The true is a little bit different. Polish FCY/LCY rate was stabilized in the times of biggest fIuctuations not by IMF loans but only by possibility of IMF loans - Polish gov. just paid for open credit line just in case but AFAIK it was never used.


nah... I don't agree, in my opinion the reasons are:
- there is basically no serious equivalent of cadastral tax in Poland - which means one can keep a property longer without feeling a pain of just having it

- due to inflation ind the last couple of years prices are actually becoming in many areas quite close to the pre-bubble prices in the nominal terms

- due to banking framework fire seling is very rare - it is very hard to escape a debt burden in Poland, also, as was explained in other threads those with FCY loans where value of the property is lowest than a loan itself are trapped in the situation where selling is impossible

- renting in Poland is rather costly and uncomfortable in comparision to owning even on credit
- last but not least, ending of "rodzina na swoim" at the end of the last year kept the bussiness flowing. It will be interesting to see what will happen to the market in the void between "rodzina na swoim" and some new "let the bank and devoloper earn some more money" gov. program

There may be something else to consider here - those with EUR or CHF loans may not need to sell for the foreseeable future anyway. There isn't much concept of "trading up" in Poland - people tend to buy properties for a lifetime. If you consider that EUR/CHF loans were often given to those that wanted to live beyond their means, it may not be as severe a problem as possible.

Still, anyone buying in CHF/EUR knew what they were doing.


That's a common problem in CEE countries. But you must bear in mind that earnings/inflation also rose dramatically during that time. As far as I know, those with EUR/CHF loans are still ahead at the minute, although I stand to be corrected.


No, it was never used - it was used as a calming measure for the markets. Poland never came close to drawing on it, as far as I know.

Good to know. I will have to look that up to verify but thanks nonetheless.
Interesting rationale you provided on your view of the Polish property market as well- definitely food for thought.

Do not hold your breath on this one, the debate is nearly finalized...


Developers are being forced to fire sell, although this kept between family, friends and associates, never is it advertised.

Can you tell us more?


If you can get a willing buyer without advertising, why bother?

When the agreement is finalized - yes.


Speak to Norwegian, about quoted price sold to foreigners and real price. It is possible today to buy apartments in any city in Poland for a discount of up to 40% on advertised price. There is no market, no one is buying I am sure PIP/NewPip will agree with me.

Warszawski agreed 100%,even though the advertising prices haven't changed but actual selling prices have.i am saying that with first hand experience.sellers who are rigid about the prices are simply not selling,I know 3/4 properties personally which are in the market for over and year( for example there is a property in nowe bemowo rented by fresh point,being still advertised for 1.230mil the owner will accept 9.5 ,still not worth it,another is in sadiba rented to Polska poczta asking 2.2 owner will take 1.65, still all advertised for orignal prices) these are good rental yields of about 10% and over but there rental agreements are not good and property if vacated is worth 1/2 the price..but again they might find some stupid English teacher who thinking 10% yield is good and buy it without doing his home work.i am now in process of buying one at almost 50% less advertised price with my conditions,and this one is not even advertised at all by the realtors.

yeah, right... in order to have cadastral tax you need integrated system to track cadastral data. AFAIK the tender for this system is still in progress. Taking into account complexity of such a solution they need 1-2 years to implement it. Which is around 2015 which is election year in Poland (both parliament and presidential). Obviously whoever will propose cadastral tax will lose it... so I'm pretty sure we are save at least till 2016.

actamont.tuke.sk/pdf/2007/s3/16kaszowska.pdf


Exactly, neither party would allow any suggestion of a cadastral tax during the run-up to elections.

I would like to get the opinion from other people on this:

Since I invested my first zloty into the polish market the capitalcost I face has dropped 48%. I also see that the consensus is that the centralbank will continue to cut the intrestrate, maybe as much as one point during the next six months!

How dos this affect your decissionmaking in the short run?

How will this affect the developer and the amount of new projects?

In other economies (pre the financial crises) a cut in the intrestrate ment only one thing for the real estate market, but I am not so sure that is true in Poland atm!

Input, anyone?

It allows me to make even more overpayments - as my minimum overpayment is 2x minimum. If interest rates get cut by another 1 point, then I'd expect to be overpaying the mortgage monthly.


I don't think it'll change anything - the developer will be lending from the banks, who will still have to pay a significant premium (compared to the Czech Republic) to loan money.


Perhaps the more interesting question is - will Polish sellers on the secondary market start reducing their prices?

delphiandomine

Sorry, but: What?


ober-haus.pl/files/pl/files/en/reports/actual/Ober-Haus%20Polish%20Cities%20Apartment%20Price%20Index%20September%202013.pdf

And
media.reas.pl/en/pr/249429/residential-market-in-poland-q2-2013?rss=true

And
residentialadvisors.eu

Third quarter rapport from Reas!

Cliffnotes:
- Slightly increase in the prices (1.6%) (mostly do to a increased pace in the lowend market)
- Significant negative change in the suply.
- Siginficant increase in the amount of transactions.

Light in the tunnel, or just false hope?

Where is the report, I can't find it.

Upper left corner!