Poland's apartment prices continue to fall

I see a lot of stubborn sellers in Warsaw. They put out silly prices and wait and see. Some flats have been on the market for over a year so these prices have no reflection on market value. If your flat doesn't sell in max 6 months then the price is too high. This does mean there are more rental properties on the market and I find rental prices quite cheap related to the supposed value of the property. I wouldn't buy off plan yet. I see developers finishing blocks with less than half sold.

ober-haus.pl/files/pl/files/pl/reports/aktualne/Ober-Haus%20indeks%20cen%20mieszka%C5%84%20-%20polskie%20miasta%20Luty%202014.pdf

New data from Ober-haus.

The trend from the last 12-18 months seems to be stable and maybe even pick up.

There is very clear signals that the market has been flat for some time now, and there is reason to think that the trend as shifted from flat-down to flat-up!

THis stats dos not say anything about what kind of apartments it is, and therefor there is at least a lag of 6-8 months before a trend can be significant, but all good news are news, right?

Owner in Krakow

There are some cheaper end homes selling, but word on the street is some of the flat developers are letting (renting out) new flats for whatever reason instead of selling them. One sales person told me "it's because we can't sell them", but of course it could also be they want to hold and sell for more later, although how on earth people afford flats here is a mystery to me. And the houses too, they seem quite steep compared to wages in almost all cases. But, none of those practical points stopped London and some parts of the UK from reaching dizzy heights, so.... hmm... (note Ireland's prices fell 50%, although the UK's did not)

Perhaps there are different views? According to this article, Poland seems to be back in the top ten.

telegraph.co.uk/finance/personalfinance/houseprices/10697448/Global-house-price-league-table-Spain-and-France-languish.html

Thanks for posting that, very interesting. Not seeing it myself, not yet anyway.

This is by no means scientific, but I've just checked the listings, not hugely thoroughly but checked them. I know for a fact that some of the cheaper (actually cheapest) places are selling inside of about 2 months, but it would appear at present that these are the keenly priced places -- so this is just what you'd expect. The question is whether it's somehow up from here or (where prices are rising, not sure where that is but assuming it's true) it's not just a blip upwards before things resume downwards as happened in the UK in the 90s and other places too. If the prices rising are just asking prices, or the Delusion Index, it's not really a measure of anything except seller sentiment. Casting a glance at the listings, I do see over-priced property but I also see a reasonable occurrence of "nowy cena" and "Nowa niższa cena!! " The question is whether to gamble now or not, because prices don't often seem to shout "buy me!" like they did in some parts of Eire last year etc (note that Eire has contracted somewhat economically in the last quarter, surprising many:

irishtimes.com/business/economy/irish-economy-unexpectedly-contracts-in-setback-for-government-1.1723610

Right now sales of new flats in Warsaw seem to have almost vanished compared to even 5 years ago. People just aren't buying.

Thanks for the heads up on Warsaw, I had thought they'd be selling like hot cakes there given the supposed price increase reported in the paper.

2 or 3 flats not far from me (secondary) have been on the market ever since I can remember here -- 3 or 4 years.
Not surprising when one enquires how much they are, although one seems to have been reduced in price by a lot and still won't shift.

Yet they are building block upon block here with more due to complete in 2014, build build build. I don't know who they're expecting!! I think they are happy to leave them empty or rent them out, as only a very few seem to be selling so far.

This graph (IF correct) appears to show prices per sq metre continued to fall in this area in 2013 and to date
mieszkania.trovit.pl/28127/cena-dom-wroc%C5%82aw

Nice material Wroc!

Anyone knows if its possible to find this data in a longer timespan then three months?

I would like to see this date over the last 5-7 years!

Btw:
I am going to buy one more apartment in Krakow during this summer.
I have 2-3 offers that I am considering atm but are still looking.

The critteria is:
- Central, north, north west area. (Around nowy kleppars area.)
- High standard, new is best.
- 33 to 45 m2

I look around a lot and have some, but I am greatfull for input of intresting units?

Another quickly found example, here: House sub 1 million zl, reduced by 12% since late 2012, and reduced another 5% in the past week. Now, the ad gives no price at all. This suggests no one was even interested at the lowest price ever which actually compares favourably with less decent areas. It's on with several agents and the owner direct.

Flats: Partynice a lot off %, and not far from Borek, 7% off without even asking.

Quite a few reductions, this one is down 200 thousand zł in 2 years (that's 23% off approx.)

699, down from 899.

Probably sold by now of course.

• 
  200 thousand reduction - house
  

Priceindex for March is out (Ober-haus).
ober-haus.pl/market-reports-pr

Clifnotes
- Marginally down in Warz and Krk (the same that had the most increase in February)
- Marginally up in the others
- All numbers are marginally
- Establish the consensus that we are in a horizontal trend in all major cities in Poland

My monitoring recently:

1 or 2 house sellers increased prices 4-5% after reducing over the past few years by 20-30%. Not sold of course.
One flat seller in a good street went to market at 360K January, reduced to 299K last week which is very good value for there. Still unsold.

Reasonable value flat unsold gaining a new agent every week, still unsold.
Some agents telling people certain areas here are "holding their value" despite my observations that prices are eroding down in those areas. All that's "holding" is the stubborn asking prices of sellers in those areas, month in and month out. Buyers are few if any.

Then the story is a bit different in Krakow.

Some unites are "dead" and most likly will not be sold untill we see a bankrupcy from the constructor.

Some units are on the other side quit popular, and (without having any numbers to back me up) I assume that the transaction volume is increasing more then eventually the prices are doing.

Firms continue to put out new buildings on the market, and there seems to be no slow down here.... I just dont get it, but I assume the margins are still way to high and that "polish stubborness" play a important role in the decisionmaking process!

Anyway - I am more positive to the market in Krakow now then I was 12 month ago, but I still think its at least a 10-15% chanse that the prices can dropp 10-15% more then next 1-3 years!

It's hard to know what the chances are because there are many factors that can take us by surprise, such as in the UK where the government started to guarantee mortgages. Price discovery can be difficult in a low interest rate or lax lending environment, for however long these things last.

They have built a lot of apartments here, I'm unsure as to why. I assume they're expecting to house workers for some of the multinationals here. Some of the apartments are priced not far from 'almost realistic' (except if interest rates rise considerably, then these prices will look very premium) and some apartments are priced as if they expect the occupants to be very rich foreign buyers. It is hard to imagine why they think that so many executive apartments in that spot could find a buyer but I assume they did some homework before building. I'll be truly fascinated if they sell more than a few apartments there, or actually any.

This is a case in point: Brits in Spain selling a villa for Euro87K, bought 13 years earlier. A financial disaster, the article suggests. (Originally valued at Euro250K)

uk.finance.yahoo/news/250-000-spanish-villa-sold-070633166.html

After 13 years living in the south of Spain, the couple returned home in 2012. Their three-bed villa in Almayate, near Malaga, was initially on the market for €250,000 (£206,000). It eventually sold for just €87,000 (£71,500). They have moved back to the Plymouth area, where they lived before moving to Spain.

There is also a flip for the transient English school teachers in Poland who are now locked in with more competition,less hours and lower rates. Many here in Warsaw could not even consider leaving Poland as they can no longer afford the UK. Even if they decide to go back most could not provide an employment history to satisfy the DHSS.

UK prices have in some regions gone from bonkers to stark raving mad (not all areas perhaps but many).

Where I live we went past stark raving mad a few weeks back. I think we are now in the official monster raving loony period. Still, not long to the next crash.

Must be Lun-dun, Norwich or Cambridge, right?

Apparently, prices in Wrocław are UP 14.4% year on year !!

Doesn't that outpace even London, England? The question is, why? And how? And is it true?


And apparently you have reason to cheer if you're an owner in these cities too...


Flight of fantasy or reality? It all sounds incredible. I'm not sure because I am not currently keeping a close eye on things but from a quick glance again today I think some asking prices look to be up. Where can I see what they actually sell for? Also looking around the town, I am pretty sure I still see the same old for sale banners hanging around for ages.

No, prices in Wroclaw are NOT going up. They have been decreasing for 3 years.

Thank you.

On what are the press, such as NPE, basing their stats? Asking prices? A small sample of sales skewing the figures?
Should the price of a home in Wrocław today be the same, less, or more than the same home in 2005 or 2006, for example? What percentage plus or minus 2005's should the price be, approximately?

I ask because I have been taken aback at the prices private people & developers are asking for flats and houses, and they refuse to negotiate much. When it comes to flats, it is especially interesting because there are many blocks being built all over the city and yet the prices seem to be assuming everyone has a good salary and is happy to pay about 5400 a square metre (in one new estate case near me 7500 a square metre). The cheapest example I could find on a flat was a seller willing to 'only' take a 20% profit on the price they paid in 2005. When it came to houses, sellers were similarly minded. Therefore, I assume a 20% increase on the 2005 price is a bargain?!

An example is a pretty ordinary new flat near the TV station that was 240K (finished) in 2003.
A fag packet calculation says that today it's worth about 470-500K.
I assume the same flat hit something like 600-650K at peak Q2 2008.
This seems to me to be a function of credit setting the value, not wages.

It seems remarkable to me that selling prices in Wrocław are 20% higher than they were in the not exactly cheap middle of 2005 and that's considered a bargain now according to many. I also marvel at how many flats are being built everywhere and the developers are pretty much building on every bit of land, so sure are they of buyers. I can only assume there is going to be company after company with employees opening in the city and these builders reckon they're all going to need a roof over their head. The volume of flats suggests they must be very sure of demand from somewhere, surely?

Of course, there are a number of advertised secondary market flats and houses where the prices can be seen to drop if ads are tracked. However, generally, they very seldom drop to what seems to make sense financially before they either sell or get withdrawn and offered for rent.

Apparently, developers are not feeling much of a slowdown and report rising reservations and are building more and more with optimism :

The beginning of 2014 . Was for poor housing loan market . What, then, explain the very good sales performance of developers?

The Polish Bank Association ( ZBP ) calculated that after fatal for the housing loan market last year , this will be better , including through budgetary subsidies under the government program " apartment for the young" . However, the data for the first quarter , which gave on Thursday PBA, are less optimistic. Banks granted because only slightly more than 41.9 thousand . housing loans , or nearly 8 percent . less than at the end of 2013.

Of course, I have no idea if it's spin or accurate. It is what it is. I can report locally Porsche are building a new showroom. So either we're in a credit bubble still, or miraculously 13% unemployment and small wages gets you a Porsche somehow.

Rising unemployment may not necessarily have an adverse affect on wealth creation. It also lags behind gdp growth. Businesses in Poland seem to be growing and profits are healthy. GDP growth rate predicted around 3% for 2014 double that of 2013.

There is more money in the Polish economy so there will be a demand for luxury cars. I see a lot of luxury cars in Wroclaw because of 1 reason. Most people who drive a luxury car are business owners so they get a tax break.

The developers are doing good but not great. Every year, the land gets more expensive but the price of the flat stays the same price. So, least profit for the developers but still good.

I think is a good time to buy in Wroclaw. However, buying a property should be the last thing to do.

That bit doesn't really make much (or any) sense.

That'll be the1 % then. They maintain their wealth no matter what.

ober-haus.pl/files/pl/files/pl/reports/aktualne/Ober-Haus%20indeks%20cen%20mieszka%C5%84%20-%20polskie%20miasta%20Kwiecie%C5%84%202014.pdf
27% you say (",

Why's everyone leaving Wrocław off the charts now? Is everyone unsure and so not including the stats??!

From what I can gather, other than realistically priced property, things are not bouncing along nicely here. Yet, I am pretty sure I've seen some higher than before asking prices along with the 'nowy cena' reductions on other properties.


It does seem that way. There are some people here who seem to be totally minted, some live on otherwise normal estates near me. I often want to say to them "really nice new car, won the lotto?' but I know that'd be asking for a slap and make me late for my bus...

A lot of it is just fur coat and no knickers. There are plenty of people in PL with top of the range smartphones who can't afford to make a call on them.

I dare say you're right. FWIW been around Wroc today and quite astounded at how many new blocks are going up from Partynice to Opolska to Bardzka to Klecina. Build build build.

I don't know if this is to be taken as a bull market in apartments commencing, but an acquaintance whose word I trust told me some 80m2 flat near him (Partynice borders) sold in about a week. A quick check reveals it was not actually cheap, it was pretty much the usual price you'd expect these days (high in my opinion!) although it was in good condition. Either the seller got lucky or it's a good estate and so sold quickly (or it's not true, but I doubt he'd lie to me, no reason to do so).

Well, I think my acquaintance only knew half the story. Yes it's true the for sale banner was only up for 5 days before the flat sold, but a check on Trovit reveals the flat was actually bigger than 80m2, and was reduced over some months by approx. 20% until a buyer came along. If the buyer then rounded the price down, the reduction would be nearer 30%. I guess that compared to some other flats on the same estate where they're asking a fair amount more, that one was "cheap" but still a lot of cash considering local wages. For that price, I'd rather have a house.

So, this is a typical good but not spectacular estate in Wrocław.

In Q3 2006, a 70-80m2 off-plan (before being built) large estate flat would set you back 3300PLN per square metre excluding finishing. Off-plan prices are generally cheaper, of course.

Today, even after the fall in prices, the same flat on the same estate finished is fetching 5700PLN per square metre on average.

Of course, a finished flat does cost more. But even so, have wages doubled since 2006? No.

The demand is driven by employment hopes real or imagined, and most probably credit availability.

In a nutshell: the prices have increased hugely since 2006, even with the supposed correction in prices Wrocław 'suffered'.

None of this makes any sense to me, but the rises in the UK didn't and don't either.


Compare and contrast that with another part of Wroclaw just 1km away from the first. There, a year 1998 flat of the same size purchased for 265000PLN in Q2 2005 is still unsold at an asking price of 350000PLN now (and has been unsold for several quarters).

So, someone who bought a 1998 secondary market flat a full year before the 2006 off plan flat, for approx. 10% more money than the off plan flat, finds the value of their flat has gained much, much less than the buyer of the off plan flat on a plot 1km away -- something like a 20-30% gain versus 70% over the period 2006-2014. And this disparity exists between two private estates quite close to each other, both reasonably 'leafy' and near green spaces. In fact the flat that performed more poorly is even near a tram line when as the other one is only near a bus.

Throughout other parts of Wrocław, prices have probably done similar things between close estates, but this seems the most stark example I know of.

However, even on that same estate that displays little in the way of depreciation compared to the other 1998 one, a detailed look at Trovit reveals at least 2 or 3 incidences of flats listed in early or mid 2013 for higher prices than now, and those same flats relisted this year at a lower price (approx. 3% lower). Checking through some other sources and search engines, it looks exactly like even those flats didn't sell and were instead rented out until this year when the owners have tried again to sell, for a 2-3% lower asking price.

So, in final summary at this juncture, although some asking prices might be up (while many that I have researched are actually down, see above) it remains to be seen if they're actually higher selling prices.

But here's an example of how asking prices HAVE leapt 20% in some cases.

Similar size flats, duplex, same estate. Last year 329K 71m2.
This year 399K 68m2.

This seller decided their asking price needed to rise 5% after many months on the market. Unfortunately, they're not the only ones. I still cannot understand why in 2014 a flat now costs the same price as a house did 10 years ago in the same street.

• 
  Flat with 5 percent increase this year
  

They probably add about 5% to offset inflation / operational costs, so in 10 years the price (in theory) should be 50% more ;).