Poland house prices recovered faster - Summary of 2010

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Report regarding house prices in 2010

part of the report ad link to full article polish mortgages .eu/2,1,27

HOUSES WITH 200 SQUARE METERS SURFACE AREA

House prices are based on much longer cycles than the recent crisis in housing prices. Declines began in the second quarter of 2009, while in the case of rent, reductions began in autumn 2008. In 2010, house prices responded more quickly to the economic recovery. Everywhere outside of Lublin, where the average price has not changed since the fourth quarter of 2009, bids are higher. More than 10% increase in prices in Krakow and Poznan, Warsaw 5.4%, Wrocław by 5%. On average, the largest Polish cities, prices of small homes rose by 5.7% while the offer prices of flats at the same time increased by 3.7%. It is worth noting that in the case of houses a few percent translates into tens of thousand.

regards
PM

So people better buy quick, before the prices go up even further lol.. Heard this spin before...
MR Charlatan

Since when have you allowed a little thing like statistics and facts to influence your comments. Still waiting for the 60% crash in prices? What has happened to the predictions Milky?

If you are thinking of purchasing property in Poland, don't listen to the predictions of developers. This site has been hijacked by a click of spin developers, trying to sell their property bubble.WAIT.

"WAIT"!!!!. For how long?. Until/when/maybe, prices have dropped another 70%?. Lets really mislead people. I predict that petrol/diesel will fall back to 2PLN per litre, so don't buy any more at the inflated prices being charged at the moment. I along with all the experts (please do not ask me to cite sources as this confuses the issue) predict that OPEC will have to reduce their prices soon in order to comply with the wishes of the general public. You know it makes sense.

youtube.com/watch?v=tWfDm_bqwUU

any danger of a comment to go with the link ?

Just put in the word bubble.... i have not looked at the link , but its sure to be about bubbles...

You ought to have a look. Its some obscure, feminist, nutter who drones on about positive/negative thinking. Where is she from?, California, home of the fruitcakes!!! so this makes her an expert on the Polish property market. Talk about "off topic", what next? an archive film of Chairman Mao citing his views on the peoples movement, is that relative to house prices in Poland? If this is the only contribution that Milky can make to this thread, he must be getting desparate.

Already down 15% this year, so thats a significant step. Let the crash continue for a couple of years and it won't be far off...

"NBP: housing prices to remain stable in 2011
Date: 22.12.2010, Time: 14:52"

This according to the National Bank of Poland, can you site your source or link? or is this just wishful thinking again?

LOL.

Hint: Reality beats predictions. See my other post if you need a link in English.

(This maybe the article that it is referring to)

Starting prices of new apartments in Poland fell during the year by as much as 10 percent. Comes completed housing that lacks takers. Customers prefer to premises under construction, because they are cheaper

- The supply of new flats estimate of over 44 thousand . We are in a comfortable situation for the buyer : a wide selection , a large pool of ready units , new projects arranged with an emphasis on smaller premises - says Maciej Dymkowski , president of the portal Tabelaofert.pl .

Central Statistical Office announced , developers have started in 2010 . By more than 40 percent . more sites than in 2009 . Meanwhile, sales offices some months in arrears developers ready apartment.


Why it would be wishful, or something I have done again?

For record, I have no interest in further properties in Poland, two is enough.

However, its says something about you that you are defensive about falling property prices. Wishful thinking, perhaps? Need rising prices?

Reality, is Avlon's enemy. He is a dog of profit and the reality he gambles on, is dead. The bubble is bursting... Do not buy property in Poland... Wait.

Just something to think about

I own a small apartment in the centre of Warsaw (about 31 sq metres). I have had it for the last 7 years and I have no mortgage on it.

I rent it out at 1800 pln per month. It is very easy to let, it is never vacant for more than 2 weeks and usually there are a queue of people wanting to see it

Now assuming that the price is 10K / m2 (and this is on the low side as others are advertised at 11 - 15K m2) then my apartment gives me a gross yield of 7% which is repectable and far more than I would get from a bank

No supposing Milky's predicyion is right and the market falls by 60%. The yield for my apartment would be 17%. This is great news as I can buy several more, pay of the 7% mortgage interest cost and pocket the 10% yield all earnt from someone elses money

Loads of other people will start doing the same thing which means that prices will quickly rise agian, or more likley never really fall in the first place. So it looks like your prediction of a 60% price fall is not going to happen or are you also predicting a 60% fall in rent, wages, cost of living etc...

I'm confused - the price would fall but your yield is unchanged - in fact your yield relates to what you actually paid for the place.

And where would you get the cash to pay for these other flats ? You would still need some deposits. Maybe OK for you but have you any idea how hard it is for a Warsaw citizen with a monthly avg wage of 4000 to scrape up a 50.000 deposit ?

PLus your yield figures exclude repairs, management and tax (which I presume you are not declaring but you should !). Take those out and it is more like 5%. Better than the bank but a lot worse than the stock market.

The majority on here are just plain liars with ulterior motives but that statement in relation to your bird cage in Warsaw is just illogical.

I still maintain that the prices will collapse 60% from the 2007 ponzi prices.

"then my apartment gives me a gross yield of 7% which is repectable and far more than I would get from a bank"

The yield on our apartment in (central) Krakow is about 4.5% before costs after the recent falls. So after costs its not a decent investment at all in a stable market, never mind a falling one. Maybe Warsaw is different, in which case buy two.

And as has been pointed out, yield from rent is related to purchase price, prices come down and renter buy - which also means the number of renters fall and rents fall. I'd love to be able to charge more rent, but wages in Poland are so low its impossible.

Sorry Mark, er, I mean 'Milky' but that simply isn't happening, no matter how many forums you spam. You should have bought when you got here, before prices went through the roof.

Just out of interest, you've been coming here for about two years repeating the same comments about prices going down by more than 50%; could you perhaps give us some indication as to when this fall will be?

Hmmm. Don't quite know what a Ponzi scheme is, do you?

A housing bubble is a perfect example of a Ponzi scheme

No it isn't. A Ponzi scheme is by definition fraudulent. Housing bubbles happen because seller and counterparty agree, legally, to transact at a given price. Doesn't matter if that price is fair value or otherwise. Secondly, what is it about the mechanism of a Ponzi scheme (newcomers to the market finance existing market players, fraudulently falsifying the performance of the existing asset) that applies here?

No it isn't. Bubbles usually run on the 'greater fool' basis.

Much like a Ponzi scheme. Those who get in first make money, as time goes on the number of (suckers)/(people able to borrow sufficient funds)/Bank Funds) runs out. Bubble pops/Ponzi scheme collapses.

So clearly you don't know what a Ponzi scheme is either.

Exactly...The governments also participates by refusing to build much needed apartments, even though they may promise to do so in their pre-election manifesto. Keep the demand high and rob as much as possible before they know it's a PONZI.

Brown envelopes are the foundation of property bubbles, they circulate among the triangular system of the a ponzi (banker,minister,developer)It's all a fraud....

Care to explain that or are you just going to make idle comments?

That's why it's important to get in on them early...

Has it got something to do with flashcards?

Boom boom!

Ah, flashcards, takes me back...

OK, hippies, here's what a ponzi scheme is:

What is it?
A scheme in which performance of a fund is falsified by claiming assets under management - ie, the overall value of the fund - is the same thing as its performance (ie, did the fund, assuming assets under management to be unchanging, beat the market?)

How does that work, then?
As other posters have said, early adopter A invests $1m. Later, investor B adds $500k. A is told that the value of his holding is now worth $1.5m. B waits in line for C,D, and E to refill his book.

Can this happen in secondary property markets?
No - the sale of a property in the secondary market is for a fixed physical asset - all the fancy bookwork in the world won't make it happen that I have two bidders for my property, and somehow the price I get for it is the sum of A and B's offers. For Ponzi to work in this situation, that is what would have had to happen.

Can this happen in primary property markets?
Yes, if you are investing into property as a fund using REITs - property market financial derivatives in which you don't necessarily own the property itself but you are party to a share of profits at sale, then value can be falsified as with any fund. But if you are a buyer of an individual property, then no - unless as does happen, the money runs out on the development and creditors are paid off on a first come, first served basis.

What is nota Ponzi scheme?
Any situation at all in which investor A buys at the bottom of the market having either the capital or good sense to do so, and sells later to B at the market's peak, the prices of both transactions being determined by the market. That's just good investment.

Get it now?

Wrong. And your explanation goes down hill after that. What you have posted is a salesman's excuse why secondary property bubbles are not a Ponzi scheme, it does however explain why property CAN be a PONZI scheme but attempts to suggest that 'secondary' property is different from other property, thet because its an asset, its has a 'fixed' value. Ponzi schemes are not about adding assets or whatever crap its trying to put forward as an excuse.

Ponzi did not sell real assets in any case, he sold stamps.

Ponzi schemes are about conning people into believing that returns on investments will be ever increasing and those returns are paid for by later entries to the scheme.

Lets take Wikipedia's explanation

"A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. "(Property - Check)

"The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee (Property - Check) ,
"in the form of short-term returns that are either abnormally high or unusually consistent."(Property - Check)
"The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going."(Property - Check)

"The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases. While the system eventually will collapse under its own weight, " (Property - Check. In that situation, as it a legally allowed scheme, the crash happens when the world runs out of money)

"Knowingly entering a Ponzi scheme, even at the last round of the scheme, can be rational economically if there is a reasonable expectation that government or other person or organisation will bail out those participating in the scheme."(Property - Check)

So, yes, the property market is a Ponzi scheme. A nice, legal, safe, predictable one but with the same end result - the suckers who bought at the end get shafted.

He arent we ll getting shafted at one point or another by a ponzi scheme that is the very monetary system itself?