Real Estate / Apartments too expensive for Poles living in Poland [54]


I can assure you the 1.000 from the government for having a baby will buy about one set of clothes and two months of baby milk. Its hardly an outrageously high level of benefit and its aimed, quite rightly at the poorer sections of the population.

How many charities are there that could support you indefinitely ? And there are never ending zwolnienie lekarskie but after 3 years your benefits are cut sharply, certainly to the extent that it would be no easy life.

Work / CPAs in Poland? [8]

The Polish accounting equivalent of CPA is called a Biegly Rewident.

Its a strange organization - after the end of Communism there were only a few thousand of whom hardly any spoke English. They admitted about 10 members over a 6-7 year period (literally) so their prices went sky high and each Biegly was signing off thousands of audits.

Eventually EU integration forced change on them and they are now a pretty good organization with a difficult set of exams. A newly qualified Biegly would get paid 10-15k PLN per month, more in Warsaw. Technically they are as strong as British or US accountants but they lack the commercia/business angle, even if they have come from the Big 4.

What is sad here is that there is no intermediate qualification like Accounting Technicians. So for book-keepers you never really know what you are getting.

USA, Canada / Polack/American Polonia/Plastic Pole "culture" [568]

But by your logic then Scotland is not a country, so you can not be Scottish. Scotland at the moment is a part of the United Kingdom, with some powers to raise taxes on internal issues - just like Galicia was a part of the Austrian Empire.

You underestimate the importance of American Polonia in the fall of communism - in the 80s there were still many more native born Poles and they were a key electorate in close fought states like Michigan, Illinois, New York and Pennsylvania which coincidentally had a high number of electoral college votes. Reagan's threats to the Soviets certainly was a factor in them not going for a full scale red army invasion. In addition there was plenty of food parcels for the strikers, Polish language broadcasts organized by US Polonia, financial support for the unions - since entry visas were difficult at the time what else could they do ?

Life / Walking on other people's property in Poland - cultural difference? [51]

I got picked up one by the police in suburban Chicago - decided to walk from my hotel to a restaurant because I had already drunk a few beers - the sight of someone walking was so unusual to them that they thought I was a drifter.

The Polish fences are vile - ugly, unnecessary and a waste of cash - hopefully they will go out of fashion soon (probably to be replaced by leylandii !)

Travel / Poznan to Wagrowiec travel advice [6]

the hotel Pietrak is OK (nothing special but clean and friendly). Other than that you might struggle as its a small town but I haven't stayed in any other place there.

Life / Are Polish roads really this bad? [237]

So Poland should benchmark itself against the Ukraine ?

Surely more sense to compare to Czech or Hungary who joined the EU at the same time and had the same time to adjust in the 90s. Their roads are much better.

Travel / Why most taxis in Warsaw cheat foreigners to get more money? [38]

They are not nearly as bad as they used to be. And much better than in Prague or Budapest.

But there are probably 20% who will try and rip you off. So

1 Use whatever Polish you have when you get into the cab - even just show that you can use numbers in Polish.
2 Where possible use one of the main firms - there are more than 3 but less than 10 that I trust !
3 If leaving a pub or restaurant ask the waitress what would be a fair price and tell that to taxi driver before you start.

Travel / Why so many Indian Restaurants in Poland? Which one is the best? [42]

In Warsaw I always go to Ganesh on Wilcza - service can be slow but food is great and a long menu plus the food is not too greasy there. Up until I discovered Ganesh I was a Namaste regular and still get the odd takeaway from there.

Travel / Why so many Indian Restaurants in Poland? Which one is the best? [42]

Not been to the old town namaste - mainly because I am too lazy. I always stay in Polonia Palace in Warsaw so Ganesh is just round the corner. Will try Annapurna sometime though as an Indian friend also recommended it.

Bit of a forgotten place but India Curry in Zurawia is not bad, but its a bit more expensive and more like "British Indian" than the others. I have a mate who always wants to meet there so have been 4 or 5 times over the years.

Life / Rich man, poor man - today`s Poland [80]


whats with all those strange burgundy trams with German adverts on - look like they have come from early 1990s Leipzig !

Off-Topic / When do you teach a Polish \ English child a second language? [8]

It is not as easy as people think. In about 40% of cases the child picks up both languages well and is fluent in both by say 5. At this stage they may start to ditch the one they are not using in the playground or to consciously answer that parent in the playground tongue.

I would say anther 60% do often have struggles, delays which you will need to manage and in some cases better to stick to one language depending on circumstances. My own son just turned 5 but speaks both like a 4 year old which is a huge gulf at that age. English went better because it is so much easier. Some kinds will mix languages in a sentance "I'm going to the sklep" and others will rigidly not mix. I know plenty of expat parents with similar problems. What people with older kids have told me is that sometimes they are 8 or 9 before they are perfect in both, at which stage they are well set up for future life.

And there are some whose dads are workaholics who tend to never pick up English - I read you need about 30% exposure to a language in order to get childhood fluency so if you want your kids to be bilingual make yourself available to them, turn off the telly, put your iphone down and talk to them.

Real Estate / Residential real estate values go down in Poland [455]

A lot of nonsense being spouted by the usual suspects, most of whom seem unable to overcome their personal animus against Milky. Nobody would choose to live in such a small flat long term if they could afford bigger. In fact it appears we are going to go full circle to the 35 sqm flats with 3 generations in that I visited on my first trip to Poland in 92.

Comparisons with Nice and Hong Kong are nonsense. Nice is a beautiful place with beautiful food, beautiful climate and ocean views (pity about the stony beach). Hong Kong is not one of the nicest places going but in the Chinese speaking world it is the best place to earn a living and there are lots of Chinese.

There is a huge difference between 35 sqm and 50 sqm - those who are saying they are fine with 50m are probably right. But lop 15m off that and you take away your bedroom - now how does it feel ? Want to watch TV while your wife has an early night ? tough because the lounge is now the bedroom. Want to get up early and have breakfast watching the news ? tough because your wife is asleep. Want your parents to stay ?

Once kids arrive it is even worse - want to give your missus an evening to remember ? very easy with the cot next to you and the nappies piled up in the corner of the lounge/bedroom/dining room/nursery.

I once rented a 20 sqm flat and occasionally my girlfriend would stay but this was in London in my mid 20s and I knew that it was somehow a transitory time in my life - I spent most of my time at work or doing exams, rarely needed to cook at home and was happy with a shower rather than a bath. The idea that I would buy such a place would never cross my mind ! And single people are not the core home-buying demographic - they want mobility and flexibility rather than debt and weekends at Ikea.

I cannot be bothered to discuss the semantic differences between a levelling out and a bubble but for sure prices will continue to fall to a level where they are affordable for average earners. If you want statistics and links read yesterdays GW as there was a long article on it covering all major towns.

Life / The Adult Entertainment Industry in Poland? [67]

there is a Polish producer called something like Polki TV or maybe Polka TV - they are quite a big business from memory (did some accounting work for them a few years ago).

Real Estate / Residential real estate values go down in Poland [455]


Not sure if this meets your definition of "levelling" but PKO the biggest lender are forecasting a 30% drop in next 2 years

Housing prices in Poland will fall also in the next year - forecasts PKO BP , the largest player on the mortgage market . Analysts do not rule out that the bank's nightmare scenario , that is dramatic depreciation of housing.

We got to the latest report of PKO BP , which states that at least the middle of next year most likely is to "keep a small downward trend in prices ."

I've already nailed my own colours to the mast at 20%.

Real Estate / Residential real estate values go down in Poland [455]


I do live here.

92 was the first time I visited, as a student and I stay with some Polish relatives for a few days on edge of Warsaw. There were 3 generations in a flat I would guess to be 50 sqm. It didn't seem to be a lifestyle choice they had made themselves.

Real Estate / Residential real estate values go down in Poland [455]

Not sure whether magazine style staging makes a difference and the 8 seconds thing is certainly nonsense but just making it clean and tidy and showing some respect to buyers does make a difference - if that is not done then I do wonder about what other things are wrong with the place.

Might come as a surprize to some but I've bought 4 places here and still have 3. The last time I was properly looking (about 4 years ago) I was amazed that peole did not lock their stupid big dogs up before viewing so that on approach to the house you got scared out your wits and then had some frustrated alsatian following you about for the 20 mins you were there.

Real Estate / Residential real estate values go down in Poland [455]

In commercial property and rents are most decidedly going down in warehouse, industrial and in retail. Not sure about office. Sales prices are also very depressed.

For residential well we keep being told there is a specific definition for "bubble" but if you google "property bubble definition" you get wikipedia and investopedia. If you know of an official definition then maybe supply it ?

I will give one of my own - a developer builds a modest 150 sqm house in a boggy field 15km from the middle of Warsaw with a commute that you would be lucky to do in an hour. He initially decides he wants 350.000 euro for this in a town where the average wage is 12.000 euro per year, i.e. a 25x multiple. After thinking it through he decides he was joking and actually it is now worth 40% less than his original offer. That story is being repeated in hundreds of developments accross Poland at the moment.

Real Estate / Residential real estate values go down in Poland [455]

So what is that definition ? We are lambs in the wilderness in our ignorance. Please help us with the bible.

You can spot a bubble beforenit happens. We have one now and it's going to pop

Real Estate / Residential real estate values go down in Poland [455]


Well that is remarkably close to the wikipedia definition. If Milky were to quote that then no doubt Harry and Delphian would be deriding his dodgy source before segueing into some personal abuse about his family and him being idle.

But I agree its a reasonable way to look at it. Presuming you understand intrinsic value, you will agree that it is the present value of the future cash flows from an asset.

I have 5 properties here of different sizes and location and all would work similarly but lets take one apartment that is easiest to use as an example because the market for selling is more liquid than it is for farming or houses.

The flat is 50sqm, in a reasonable area, 4km from centre of a big town. bought in 2001 for 150.000. I rent it furnished to reliable tenants for 1400 and after tax and costs have about 1100 in my pocket. They are not students so I get rent 12 months round.

So the intrinsic value is the annual income of 13200 divided by a cost of capital that would be something like borrowing costs - growth rate in rents. I havent moved the rent for 3 years and I dont think I could in this market. So that is zero. I have no idea what the cost of borrowing is for inidividuals but with base rates at 4,5% then I guess around 7% once you chuck in mortgage insurance etc.

So intrinsic value is 13.200 / 7% is PLN 188k or 25% appreciation over a 10 year period. Maybe a little low but sounds reasonable. I didnt negotiate especially hard at the time. I have ignored sales taxes, repairs and transaction costs all of which should logically depress the intrinsic value.

A neighbour in the same block has his flat up for sale and want PLN 350k for it. That is circa PLN 7k per sqm and 86% above the intrinsic value. Asking prices for this type of flat are indeed 6-7k per sqm.

Of course you could argue about every assumption in my calculation but the general theory is correct - that relative to intrinsic values then there is a bubble.

Real Estate / Residential real estate values go down in Poland [455]

To answer some of Harry's questions !

The second part of the definition - in this case I presume you mean high volumes. Obviously the defintiion is only a wikipedia one anyway but surely as in most economic statistics it meants a reasonable sample so it does not get distorted by individual bad deals. So anything in the thousands would be enough volume to make judgments on.

If you ask why I pay tax on my rental earnings, then its a simple answer, that I am obeying the law and yes I do often ask the question why I bother when many Poles do not but for example my kids are at state school here and someone needs to pay for that education.

And finally re the bubble issue and intrinsic prices then in your Warsaw example it would still be 14% overpriced in the most liquid market in the country. A rent of PLN 2000 would actually absorb more than half the take home pay of an average Varsovian for living in a very small place - thats actually another worrying sign as disposable incomes will be squeezed.

I am not predicting an 86% fall. If the property is overvalued by 86% then it needs a fall of 47% to return to a corrected intrinsic value (100/186) and that is very feasible. In fact those levels of falls have been seen in Spain, Romania, Ireland and some markets in the US - all places where, like Poland, there was a bubble.

When will it happen ? Well we have our bet for 20% this year and then the other 25% over another 2 or 3 years.

Where does this nonsense idea come from that you cannot spot a bubble until it has popped ? During the dotcom boom in 2000 there were plenty of recorded commentators saying this was a bubble and who refused to invest and who were proved right.

Real Estate / Residential real estate values go down in Poland [455]

4600 gross is the mazowieckie average. Warsaw itself not sure but Dont think it's over 5000.

You are incorrect about average households have two incomes. Many do but in fact poland job participation is one of the lowest in Europe , only 9m people have paid employment so the average household does not have two full incomes by a long shot.

Real Estate / Residential real estate values go down in Poland [455]

So with asking prices around 350 k for 50 square metres then that extra 20 million should help about 70 lucky polish families find their dream shoebox. Assuming that they kind find 30 k themselves for the deposit, I mean that's only a years take home salary so should be easy.

Real Estate / Residential real estate values go down in Poland [455]


I think you are out of touch with the typcial struggles of a Polish household. In fact if you ask bankers and economists raising a deposit is a major issue - when the banks wanted 10% or sometimes 5% maybe not a problem but if they start to look for say 15% then it will be out of reach for most.

Lets take this mythical couple with 2 full time earnings after tax of 3000 zloty. Assume they live in a flat already and rent at the market rate of 1200. One of them runs a modest car and the other one gets the bus to work. They have cellphones, internet access and the minumum furniture but they do have a fridge, telly, dvd and a few other standard things.

Rent 1200, czynsz and bills 500, internet and phone 250, car loan 250, petrol 600 (say 2,5 tankfuls), parking 150, insurance and car taxes and services 200, bus 150, food (bare minimum 10 zloty a day) would be 620, clothes (bare minimum 100 per month each in order to look smartish for work) 200, toiletries and cleaning plus car fluid etc 200, hire purchase for tv, fridge etc say 200.

Thats already 4200 zloty with no entertainment, no christmas presents, no medicine, no holidays, no decoration in their house, no "essential" unexpected expenditure (weddings, christenings etc), no books, no music etc presume you get the picture.

So they can have no nice things at all and would still need to save every groszek for 16 months in order for a deposit. Throw a child into that equation (which for many is the catalyst for wanting to buying instead of rent and you can surely see it is a huge problem.

Real Estate / Residential real estate values go down in Poland [455]

So we do seem to have some realization that for ordinary Poles then house prices and deposits are out of their reach - remember my 3000x2 couple are actually far richer than the median household. The solution is to move to Srem and also (nonsensically if you are going to live in the sticks) to give up your car.

But giving up your car would entail new costs - for instance access to the cheapest food is in hypers, access to the cheapest furtniture requires visiting out of town places. Add in an extra bus cost (because you would still need that within the town) and is it worth it ?

Moving to Srem (I havent been to the other places you mention) is not like moving to Connecticut or Surrey. Its a potato field with very little cultural life and almost certainly would be seen as a step backwards. Poland will take another generation before those places are livable.

The real answer is that prices in populated places will drop away from their bubble levels in order to be affordable.

The stuff about the housing giveaway is interesting but it is trying to solve a 1989 problem with a 2012 answer. At the time what was the market rate ? Even now it takes about a month to get a bank loan and a notary sorted - try fixing a price when inflation is 250% per year ? How would the state have paid for the upkeep of those buildings if it held onto them ? the state was bankrupt at the time. Why would the newly free Polish state be more entitled to a kamienica in Wroclaw than a previous German owner ? how would people now finance the repurchase of babcia's apartment - the banks do not have that volume of credit to dish out even after 20 years of capitalizm. And surely they would also want deposits so taking that volume of cash out of the rest of the economy would be crippling.

Real Estate / Residential real estate values go down in Poland [455]

This thread is rapidly descending into nonsense but to go back to avalons challenge about affordability. I have no idea where his 45 k figure comes from but maths obviously not a strong suit, nor economics by the look of it.

Average wage is 3000, multiply by 12 and it's 36k. Use an earnings multiple of 3x and it is 108 k. Add a 20 percent deposit and you get to about 130 k.

And that should be about the range that family accomodation starts in smaller towns. In bigger towns add a premium for higher wages and it would be circa pln 170 k in say gdansk and about pln 200 k in Warsaw. That also corresponds with the rent to buy equation I described earlier.

I think developers could make profits at those levels because they were doing so in 2004. Inflation has not been extreme since then but it is clear that developers margins were often 40 percent or more during the boom years. Whenever I meet one they stil normally like to pitch up in an ugly black jeep wearing massive belt buckles so they are probably still getting some margin.

But heaven forbid some of them will have to make a loss on some of their existing stock.

Not sure why the government should offer tax breaks to support the market, other sectors of the economy have to pay full price for their lunch. What the government should do is help the admin process and make it quicker to get permits - that would be win win for residents and developers.

Real Estate / Residential real estate values go down in Poland [455]

As I pointed out before, rather the opposite is true. It is unusual for a polish household to have 2 full Time wage earners. Given that they make up only 23 percent of the population.

And to answer avalon I have showed the typical budget including all costs for a family and the resulting amount they could afford for a mortgage

Banks always look at the major wage earners salary and security of employment. Starting to base that on 2 wage earners is suicidal as the chance of both being stable over the period of a 20 year loan are very low.

I still think the current prices are way overdone. People do not want to live in small towns yet and the commutes door to door are actually far longer than the 45 minutes you talk about.

As for having kids well someone has too, otherwise there is nothing quite look a population decline to reduce house prices long term ! Look at east Germany which people here some are fond of referencing.

Real Estate / Residential real estate values go down in Poland [455]


Why should the government intervene ? You accuse Milky of being socialist (maybe he is) but then say the government should step in to help one sector of the economy. How is that different to bailing out the banks ?

And what can the government do ?

Allow banks to relax lending criteria or the 20% deposit requirement ? That would be extremely risky and is precisely what started the problems in US, Spain, Ireland etc

Decrease interest rates ? Unlikely when they have lots of bonds they need to sell to cover their deficits and would also damage the zloty.

Housing grants ? Because of the deficit the government needs to cut spending, not increase it and in any case there is fairly credible evidence that the rodzina na swoim cash found its way straight on to developers bottom lines.

The only intervention they should make is to reduce bureaucracy, make permits and zoning easier and reduce transaction taxes if they can afford to do so. I guess they could make a straightforward ban on foreign currency lending but the banks have more or less imposed that anyway.

I think the government probably also wants the housing bubble to deflate slowly so that Poles are able to divert more of their income into other sectors.

Real Estate / Residential real estate values go down in Poland [455]

Why cut VAT - I would love to be able to cut prices to my customers by 23% but I'm not able to and I just accept that as part of doing business here. Why should developers get special treatment ? How many jobs would be created by that and what would be the hit on the governments finances ?

Travel / Why does everyone seem to hate LOT Polish Airlines? [380]

They are getting slowly better but far from great.

One thing that does **** me off about Lot is that they never seem to depart or arrive at proper bays. Always on the bus across the tarmac which is cold and tiring either early morning or late evening. I did 10 LOT flights last month and only 2 were in proper landing walkways.