The BEST Guide to POLAND
Unanswered  |  Archives 
 
 
User: Guest

Home / Law  % width posts: 84

How deep is the Gloom in the Poland's Economy


delphiandomine 88 | 18,475
21 Sep 2011 #31
my particular interest is the building sector.

Speaking of the building sector, it will hurt house/flat builders - this much is certain. But in terms of construction, it won't have a problem - there's still so much EU cash flowing in that there's always money to build new stuff.

In fact, the real problem with new domestic property builders is that many people will sit on a flat/house until they get the price they want - even if it's totally unrealistic.
OP wielki pan 2 | 250
21 Sep 2011 #32
Thanks for your comment Mr D, how will this effect building cost, ie people wanting to build? How long will people sit when they are facing a huge mortgage? This could suggest price of real estate coming down. As I have stated in previous post, I believe that real estate in Poland has not gone up in the last 2 years, but still cheap for people living in the west. The biggest problem is the red tape when wanting to do something.
delphiandomine 88 | 18,475
22 Sep 2011 #33
How long will people sit when they are facing a huge mortgage?

A long time, strangely. I was flat-hunting a while ago, and had quite a few people saying that they simply weren't interested in negotiation. And this was in a place with a rather poor market for sellers.

This could suggest price of real estate coming down.

From everything I've seen in Poland, the prices are stable when it comes to old (ie, pre-1995 or so, and so subsidised) property. It's the late 90's-today property that's in trouble - many developers built on the cheap in order to make the price more attractive, and the build quality is utter rubbish. I know one guy who rented a 18 month old flat - and the place was falling apart. The other issue with the "new" flats is that they're often located in terrible areas for commuting. That's another reason why I don't think the price will hold for these places.

I believe that real estate in Poland has not gone up in the last 2 years, but still cheap for people living in the west.

The problem is that those returning from the West often have little to offer here -I actually think we'll see a glut of property on the market in a few years when the money runs out and they have the bills to pay. I know in Eastern Poland, many houses were built with cash from the UK - fine and well, but if you were earning 1500zl/month before in some village, what hope are you going to have when you return to Poland?
Avalon 4 | 1,068
22 Sep 2011 #34
I think forum members are pretty much switched on and aware of articles on the global financial crisis. Lets not live amongst the fairies and assume Poland will not be effected in a second downturn, the question I was trying to pose is how it will effect people in various industries, my particular interest is the building sector. my mention of trolls was tongue in cheek, sorry but sometimes people have there own agenda, its a serious topic.

You only hear what you want to hear. Same as Milky, you live in a dream world. There is a minimum price for the purchase of land and the construction of a building. You seem to think that developers will drop their price to suit your circumstances. Its not going to happen. If it costs 4-5-6000 PLN m2 to build, why do you think they will sell it to you for 2,000? . Look at the property where you live now, are you williing to sell below what you believe to be market value. I can understand why people like Milky want it to be this price, we all do!!!!

Its not going to happen, unless, its a "distressed" sale and you pick it up at auction. Have you seen this happening in Poland?, no, so why do you listen/read this bo**ocks

WB mentioned a place that was 1500PLN m2, great, no problem. The only thing is, that the property is 240m2, which, means a mortgage of around 360,000 PLN if you put a 20% down. The fact that the banks do not want to lend anything over 200,000 PLN is immaterial.

The thing that most Polish people want is a house/flat/apartment, between, 60-70m2 with 2 bedrooms. The cost has to be around 200-250,000. Unless the land can be bought very cheaply, this is not going to happen., especially in the big cities.

Look at "Teflcat", he states 210,000 PLN for a 120m2 house, excluding the price of the land. It took him six years to build, no holidays, no fun, no new clothes etc. I admire him, but I , along with others, do not have the time or inclination to do this,

The days of spending 20 years to build you dream house are over. It takes two wages just to live. 1500 PLN rent against a 1800 PLN mortgae is just not feasable anymore. Maybe, if you are used to paying this, single, no family, free to move around. Thats not the case with most Polish couples who want their privacy and a way of bringing up their own family without interference.

You can use the arguments that the French and the Germans do not takes mortgages. What do they do with their money? What future do they leave their children? Or, do they use their money to invest in shares to bring down other countries, look at the financial crises and see where the debts are owed.

Some people are advocating buying farmland. It seems that they believe currency will be worthless. Lets suppose that this is true. If your landlord need to sell his property to buy a loaf of bread, where does that leave you?

So many rumours and predictions. The same economists that tell you the world is ending, could not predict the finacial crises in 2008.
Greece is going to default. How many months have we been hearing this?
Why do we have to keep hearing this every day? They are now saying that the banks have to be re-capitalised and that the money is to come from the taxpayerers, why?. What about the people who do not even have bank accounts?

Fear, as long as you live in fear, you will be compliant, to whatever your own or the EU dictates. I don't give a damn if Egypt, Yemen, Lybia or any other Arab countries overthrow their dictatorships. I only care about my Polish family and my my Polish friends. There is no pride in fighting for an unjust cause. We should be proud of our soldiers but distainful of our corrupt politicians.
OP wielki pan 2 | 250
22 Sep 2011 #35
The thing that most Polish people want is a house/flat/apartment, between, 60-70m2 with 2 bedrooms. The cost has to be around 200-250,000. Unless the land can be bought very cheaply, this is not going to happen., especially in the big cities.

I've never seen a house/apartment for this price, Poles would love to have a large free standing house, but know that could not afford it, both to build and maintain. Thanks for your view, but you seem to be all over the place, firstly a house is only worth what somebody is prepared to pay and secondly in a major economic downturn all rules of investment go out the window. Just look at the American situation people borrowed to buy mac mansions and almost overnight the price of their investments fell by half and secondly no one wanted to buy into a sick housing market, these well off people were forced to walk away and ended up living in cars at local parks. I know the situation in Poland is different but one thing is for sure if there is a second economical downturn people will be forced to sell at rock bottom prices. Poland seems to be going well but who knows, how is it going to pay for major reforms and pay retirement pensions. Has somebody done a audit on the state of Polands finances?

The cost of building you say is up to 6000zl a metre, (seems very) I wonder what the real cost is or are these inflated by the builders.

I like your last comment that your only care for my Polish family and friends, sounds nice but that type of thinking is negative and could easily be your undoing.
cms 9 | 1,271
22 Sep 2011 #36
They do not want 60-70 sqm apartments unless they are young professionals with no kids. I lived in such a place and thought it was great but guess what, 3 weeks after my first kid was born I decided it might be nice to have another room and we moved into a house.

The fact is that 60-70 sqm apartments are all people can afford at the current prices. Ergo prices will come down or the market will stagnate.

The build cost might be 6000 per sqm I dont know much about apartment materials but I do know a lot about build costs for office space (circa PLN 3500), for warehouse space (circa PLN 2000) and for retail space (circa PLN 4000) and cannot see where such a high cost comes from unless it is inflated land values, inflated builders margins or, heaven forbid, inflated developers margins.

And as I have said many times just where is an average joe earning 3000 per month going to get a deposit of say PLN 100k ?
milky 13 | 1,657
22 Sep 2011 #37
In 1999 a waitress in my friend's cafe in Poland earned 5 zl/hr and a coffee cost 5 zl. Today the waitress still earns 5 zl/hr and now coffee is 6. So a person has to work over an hour to buy a stinking cup of coffee? Wouldn't this make you gloomy? Where are the statistics to cheer that person up?

your observation is correct.

Really? You're friends with people who exploit their workers, seeing as the minimum wage is actually much higher than that?

Stop attacking people for telling the truth,after tax many people are on this amount,next time your in the supermarket ask a worker how much they earn into the hand...

If you are on 86 euro a week and it's taxed how much do you get an hour in the hand?? You'd be doing well to pay for a cup of coffee.
Avalon 4 | 1,068
22 Sep 2011 #38
Just look at the American situation

Why? Is it the same as in Poland?

The build cost might be 6000 per sqm I dont know much about apartment materials but I do know a lot about build costs for office space (circa PLN 3500), for warehouse space (circa PLN 2000) and for retail space (circa PLN 4000) and cannot see where such a high cost comes from unless it is inflated land values, inflated builders margins or, heaven forbid, inflated developers margins.

I did not include the price of the land, nor the architects fees, time involved in planning/surveys, nor the cost of connection to the services, interest paid or lost on the money used or the cost of running the company, staff, accountant etc. Just building costs for non-luxury flats, depending on what materials you choose to use.

They do not want 60-70 sqm apartments unless they are young professionals with no kids.

You answered your own statement.

"The fact is that 60-70 sqm apartments are all people can afford at the current prices."

Thats if they can get the banks to give them a mortgage.
milky 13 | 1,657
22 Sep 2011 #39
"The fact is that 60-70 sqm apartments are all people can afford at the current prices."

They could adopt a few Smurfs instead of children.
peterweg 37 | 2,320
22 Sep 2011 #40
Its not going to happen. If it costs 4-5-6000 PLN m2 to build,

Houses cost 3K/M2 to build, apartments should cost less than that. New apartments are being sold for just over 5K in Krakow. Land isn seperate, but obviously you need far less with a multi story.

I did not include the price of the land, nor the architects fees, time involved in planning/surveys, nor the cost of connection to the services, interest paid or lost on the money used or the cost of running the company, staff, accountant etc. Just building costs for non-luxury flats, depending on what materials you choose to use.

You are bullshitting
PWEI 3 | 612
22 Sep 2011 #41
You can build a house for 5 grosz per metre if you really want to. However, you are going to get what you pay for.
Wedle
22 Sep 2011 #42
So many rumours and predictions. The same economists that tell you the world is ending, could not predict the finacial crises in 2008.

The real one to watch out for, is a crash in China real estate values ( the house of cards), at that point all the BRICS will follow. China has a massive real estate bubble, so does India and Brazil. Many western banks are exposed to to China, India, and Brazil. Poland is peanuts in comparison. If it is going to happen it will be in the next 6 months.
peterweg 37 | 2,320
22 Sep 2011 #43
You can build a house for 5 grosz per metre if you really want to. However, you are going to get what you pay for.

I'm quoting the insurance company, who will know as the rebuilding cost and have spot on, up to date figures. I'll beleive their figures over some anonymous internet poster, especially one trying to justify the prices of apartments..

The real one to watch out for, is a crash in China real estate values (the house of cards), at that point all the BRICS will follow. China has a massive real estate bubble, so does India and Brazil.

Yep, thats a certainty.
PWEI 3 | 612
22 Sep 2011 #44
Yes, because insurance companies are renowned for being completely honest, aren't they.
jwojcie 2 | 763
22 Sep 2011 #45
If 3K/M2 PLN is all what that insurance company gives then go to court man...
I'm rather in the camp of those who thinks that property prices will continue to fall but... it all depends where. Land prices in and around big agglomerations are really big factor in overall cost. Besides good specialist team to decor house or flat is also considerably more costly in big agglomeration. I mean, compare apple with apple. What brings me to next point that most analogies with USA or even WE markets are in much extent invalid. Let start with simple thing as such that there is no meaningful land tax in Poland. Investors can hold land much longer without burning their hands with it. Second thing is that people with mortgages are really small percent of population. I saw recently some statistics (unfortunately didn't save that and cann't confirm in different source) which said that percent of households with mortgages is under 6%. Most people either possess their home/flat or (staggering number of about 27%) lives in state/city sponsored to some extent council flats. The second point actually explains nicely the question often asked by foreigners: how many Poles can afford living with minimal wage...

To sum things up with property market, yes it is falling, but slowly, and mostly through inflation. There is just big big inertion of that market due couple of rules wheter it is good or bad.
peterweg 37 | 2,320
22 Sep 2011 #46
Its not what they give you, its what they charge you. They have to specify the re-building cost they set the insurance premium. You pay according the level of insurance. So I paid 1500/m2 for the house but the rebuilding cost is 3000/m2. I can pay more but they are certain it will not cost any more than 3K. Obviously this doesn't include the land, speculation and profit that buying a house involves.
Wroclaw 44 | 5,385
22 Sep 2011 #47
I was flat-hunting a while ago, and had quite a few people saying that they simply weren't interested in negotiation. And this was in a place with a rather poor market for sellers.

i understood there was a 10% mark up by the seller, which could then be argued down by the buyer.

a bit of a pointless act, but that's how it's/was usually done.
Avalon 4 | 1,068
22 Sep 2011 #48
You are bullshitting

And you knownothingabout construction.
AngelNC 2 | 85
23 Sep 2011 #49
I disagree with the notion that Poland's economy is in any kind of gloom.

It's naive to believe that Poland will stay out of trouble while the entire world is hurting. It's a chain reaction my friend.
Polsyr 6 | 769
23 Sep 2011 #50
Of course it is a chain reaction and nobody is 100% protected from it. However, in this world everything is relative, and "relatively speaking" Poland's economy is doing better than most nations. Of course, several decades of "communism" need several decades of therapy to fix the damage, and according to numbers Poland is on the right track. It takes years and decades for this to become evident in the daily lives of people living in Poland, so I can appreciate that many won't agree with me and I fully understand why.

However, for the foreseeable future, Poland will not have a debt crisis (like Greece or Ireland or Portugal or even Italy for that matter). Also, the Polish treasury did not drain itself in order to rescue large and inefficient corporations (like USA, Russia and Italy did) so they are better off for it because only financially sound and properly managed corporations can survive - in theory.

I am sitting here and eating an apple right now. This apple is imported (incidentally) from USA. It was not expensive to buy. The price was similar to apples from Chile and New Zealand. However, there is a fundamental difference between these apples. This American apple actually cost the American tax payer money because the American farmer receives very heavy subsidies from the government. So by eating this apple, I am practically eating money from the US treasury.

The Polish farmer does not quite have it as good as the American farmer. But that is why Polish apples need to be a lot better to compete. And they are better... Got my spin?
peterweg 37 | 2,320
23 Sep 2011 #51
And you know nothing about construction.

Yeah, because its rocket science to calculate how much time and materials are required to build a house.
Avalon 4 | 1,068
23 Sep 2011 #52
Try making a list of the preparation needed to build a house. Give us all a laugh. Its easy to mock someone else. If you have ever completed a project from start to finish, share your knowledge with us.
peterweg 37 | 2,320
23 Sep 2011 #53
Just explain how the cost of labour and materials magically keeps up with house price inflation, with the rocketing in house prices in Poland and elsewhere?
PWEI 3 | 612
23 Sep 2011 #54
Try making a list of the preparation needed to build a house. Give us all a laugh.

I'd love to see him try!
Avalon 4 | 1,068
23 Sep 2011 #55
Just explain how the cost of labour and materials magically keeps up with house price inflation, with the rocketing in house prices in Poland and elsewhere?

You honestly think that its just about labour and materials? Have you any idea of what goes into the planning, programming or a schedule of works or perhaps you think that you just buy some land and a DIY book.
delphiandomine 88 | 18,475
23 Sep 2011 #56
I'd say the latter is the direct cause of so many half-finished houses in Poland. That, and simply not having the cash.
peterweg 37 | 2,320
23 Sep 2011 #57
Project management is not rocket science either, I've been doing it for twenty years. Somehow you figures come up higher that developers are selling for.

You are making the bold claims and contradicting everyone else, you have the detailed figure to hand. Why don't you prove your number with hard facts?
Seanus 15 | 19,706
23 Sep 2011 #58
It gets tiring listening to so-called experts painting a negative picture of things here. As Tusk said in his previous blog of 21/09/11, times are tough for some but it doesn't change the reality of the following,

youtube.com/user/PlatformaRP?v=fKudQHFsOzw&feature=pyv&ad=8047918610&kw=#p/u/1/gH7BE31l5wM

I'm not a PO supporter as Polish politics don't really interest me that much but this is a plus for them if his allegations indeed are true.
Avalon 4 | 1,068
23 Sep 2011 #59
Project management is not rocket science either, I've been doing it for twenty years.

In construction?
peterweg 37 | 2,320
24 Sep 2011 #60
No, Electronics and software. Saying PM is easy is wrong, because obviously building ITER isn't the same as building a small house. The concepts of PM are pretty simple.

Apartments are obviously a different scale to what we are talking about (a simple house), but PM should not add 100% to the costs, if they do its completely missing the point.


Home / Law / How deep is the Gloom in the Poland's Economy
BoldItalic [quote]
 
To post as Guest, enter a temporary username or login and post as a member.