Stronger zloty - potential driver for Poland's property market

So I am the first one to say when I am wrong!

To day the zloty is at 4,28. The Euro is getting stronger vs every single "important" currency. Dollar, yen, french.
In my head that should give a stronger zloty as well (based on history)

The reasons that this connections dos not hold this time is:
- Unsecurity about the political climate.
- A "lag" in the positive expecatations in the Euro area, so the appreciation of euro now comes from the positive signals back in the spring/summer this year!

- I am wrong. Less risk in the euro area dos not bring back the zloty to the 3.5-3.7 area to euro.

The mark of a man.

Norwegian, I am not giving any form of financial advice, buying USD/PLN at 3.14-3.16 and selling PLN/USD at 3.20- 3.24 is very easy money at the moment and it looks like we could have a few more months of easy pickings to come.

Thanks for the advice, and it may be a very good one for what I know!

I am not in that market, and I dont have enough behind me to be able to enter without loosing my nightsleep.... so I will stay out of it for at least some years!

Reason why I bring the currency question into the topic of real estate is that people tend to forget about the currency aspect when they are doing the calculations.

I know that the market of foreginers (with loan in there own currency, or euro/french) and the polish with a mortage taken in a different currency then zloty is shrinking and by fare not so important then in 2007/2010 periode, but I think that a shift of 10/20% for 10 to 20% of the players / potential players in a rather smal market as the polish real estate actualy is, the stability and eventually a appriciation of the zloty can be a very important factor to be aware of the next 1 to 3 years when we predict the market!

My prediction is there will be a Polish group planning the same action as was taken in Croatia now they have a success story to follow.

blogs.wsj.com/emergingeurope/2013/07/04/croatian-court-tells-ba nks-to-convert-swiss-franc-loans-hungarian-court-doesnt

BUMP

Hehe, I had to bump this tread.

We are not there yet, but the euro/zoty cross has been touching 3.9-3,95 and atm looks to find a new place around 4.0.

It took longer time, but my best guess is still that we will reach 3,7-3.8 for the euro (I think this is the "right" fundamental value)

What that will mean for the market for apartments? No idea - Economic laws obviously dos not work in Poland!

It is at 4.02 this morning. One euro = 4.02 zloty


Looks like they don't work in Norway either.
One euro = 8.5 NOK

On what contition to you base that the laws of economics are not working in Norway? I assume you think the Euro is very strong? You may know that the price of oil has fallen close to 50%from its peak, and this (oil and gass) is the most important sector in the norwegian economy. When the price of oil was at 120 dollar a barrel the euro/nok cross was at 7.2-7,3, so i think a correction of 15% is according to both models, teory and also common sence. If you feel different, feel free to enlighten me!

Exactly. It's a tribute to Norwegian common sense and foresight that the Sovereign Wealth Fund is in place and so well managed.


It is very much so.

On what condition do you base it that the laws of economics are not working in Poland?
We pay less in zloty now for the euro because euro has become weaker globally. Despite the euro becoming weaker you pay even more for it (8.5 NOK vs. 7,2 - 7,3 as you say) in NOK which means the Norwegian crown has weakened even more than the euro despite


Why should that all mean that "Economic laws obviously do not work in Poland"? Clearly, they are much likely not to work in Norway as Johnny said!

Interesting discussion although you are missing a very important point with regard to the NOK, in that it is artificially pegged to the EUR.... Just like CHF use to be pegged to the EUR until it was removed earlier this year and we all saw the impact it had on the CHF-EUR rate...

If NOK is pegged, why has it lost value against the euro? It should have stayed where it was and Norwegian common sense should have obliged their central bank to keep it at its pegged or fixed level. Is it pegged only one way so as not to strenghten against the euro, but allowed to weaken against it?

Technically, the CHF wasn't pegged. It was simply not allowed by the Swiss central bank to strengthen more than 1.20CHF to 1EUR, which they achieved by selling vast amounts of CHF on the open market.

A peg on the other hand would mean that it wouldn't trade more than within a set band. The EEK, LVL and LTL were examples of such fixed pegs, while the DKK is an example of a floating peg. Anyway, to my knowledge, neither the NOK or the SEK have been pegged in recent times, but instead have floated freely, subject to the usual interference. Wikipedia says the SEK fully floated in 1992.