IS IT A GOOD TIME TO INVEST IN POLISH REAL ESTATE?

Eventually the crisis should end, and things will perk up and prices are likely to eventually rise.With land and real estate prices falling in Poland due to the global crisis, do you think this is the time to invest therein? Or will the prices come down even more? What is your hunch about this?

Nobody can really predict what the housing market, or any other market will do.

Nobody really knows, but I will tell you this: JW Construction, one of the biggest developers in Poland is currently bulding or just finished about 6000 flats. In Q1 2009 they've sold about 120. So it will take them 12,5 years at current speed to sell all they've got. Ok, current speed is low, but even if they will sold 400 in quarter it is still 4 years...

CONTRACTORS- Is Stucco common in Poland? Is the money there iF you have your own business?

Pace of sales is currently increasing, and no new investments are being started. It seems now could be the moment for a good investment. Good luck

On this topic, here is an article from Warsaw Business Journal: wbj.pl/article-46148-polands-next-property-boom.html?type=lim

Like everything, you have to take this views with a grain of salt, and it is written by someone who has a vested interest in the real estate marketing in Poland improving. You may agree with some points and disagree with others. Certainly, this view is very bullish. It fails to mention what, in my opinion, is the biggest issue facing the real estate market at present, and that is the lack of access to mortgage finance, both for individual investors and developers alike. The vast majority of buyers in Poland need some kind of finance to fund a purchase, and if this is not forthcoming, they will not be able buy, simple. Let's hope the banks start to lend again soon...

good point

This is the best time to invest in real estate. But emember - LOCATION is everything. Get your property in a good location, make an offer the seller can't refuse and get the property. Prices will rise again pretty soon. (maybe 2-3 years).

In an ideal world, buy a place that needs removating and do the renovation yourself.

The time to buy was in February or March when the dollar was close to 4 to the zloty and the euro was 5 to the zloty. Even if you didn't buy at quite the bottom of the market as prices will likely decline further, you made a killing on the foreign exchange gains as the zloty is now appreciating.

How many percent did the prices of real estate fall in Poland ?

good time? good time was 5 years ago... who invested at that time is quite lucky today.

I invested 7 years ago and yes, that was the best time to buy. However, anyone with cash could still get a good deal today.

I would say so yes. Property prices are on the rise again and there are many sectors that have been virtually untouched by the recent booms.

Land, historic, rural properties and perhaps third tier cities are all good value for money. Even SMALL apartments and houses in the major cities are still lucrative if you choose carefully.

Its a buyers market, so your timing may be good, although prices still have way to fall until the existing new build housing stock is taken up.

The prices of real estate in Japan are falling for last 15 years.

The prices in 2007-2008 were at a maximum in Poland, and then the bubble bursted.
Such kind of prices like in 2007-2008 (higher than France, Germany, Spain or Belgium)
will happen again maybe just because of high inflation, in 10-15 years from now.

Next 2 years it will be continued lowering in prices, which will continue to be going down.

It is crazy to ask 2000 euros/sq.m. when the average pole is making about 400 eur/month.

It is a rule in Real estate, that the average price per sq.m. is the medium salary that
a normal person gets in one month.

That's why in France, where average salary is 1800 euros/month, the average price of real estate is approx 1800 eur/sq.m., and so on.

Plus the fact that are about 150 000 apartments on the market left unsold in the big cities in Poland...

400 eur a month my arse, get your facts right before talking rubbish

His facts are ok.
By GUS in 2009 salary in Poland is about 3200 PLN gross/ 2300 PLN net/ 550 EUR
but as far as I know it is arithemetical average.

More informative is median, which is (by some financial portal) about:
2500 PLN gross / 1800 PLN net / 430 EUR.

Which doesn't change basic truth in real estate: "location, location, location" :-) But I wonder, how someone on the other side of the globe, or even in another country, or even in another city can correctly choose correct location?

jwojcie good question and a simple answer, if there is anything you learn from this forum it is this, you buy in areas where the rich and elite type reside, generally buying rubbish and doing it up, a lot of ethnic groups only buy in certain areas, ie the Jew, Chinese (hong kong)

These areas then attract people who specifically want to live in a certain area thus pushing up prices..I think you have missed out in getting prize real estate in Poland as it has already been snapped up by bargain hunters and a lot of the older homes have been given back to its previous Jewish owners. The second consideration is buying near public transport, shops, schools, beach or mountain views.

With the current global situation, nobody knows the future of the Polish Real Estate market, I personally believe it will not go down due to a under supply of housing and accommodation, it will go up in sort after pockets in the downtown areas but little movement in the country areas, mainly because of lack of employment and interest to outside investors.

One other thing to watch is government debt and now talk of reduction of funding to the medical system, if the government is in debt it will mean increase in

taxes which will be paid for by people already struggling to make ends meet.
There was a lot of money flowing into Poland from the UK/US/ Ireland, this has stopped due to the economic climate.
It may be a good time to look at all offers if you are interested in buying and be very fussy

I hope so I am about to purchace a small flat and also a plot of land. Does anyone have information to where the new rail system from Gdansk Airport to the Center will actualy pass as one of the plots of land I was looking at might be to near the railway track?

A lot of people would find a railway line a negative due to noise and privacy etc, I would prefer a railway line than houses, but each to his own.

Prices in Berlin, capital of germany: average 1400 eur/sq.m.
Prices in Krakow, a city without good connections and far away
from any other capitals (even to bratislava there are about 8 hours by bus): average: 2600 eur/sq.m.

The polish real estate bubble at its best

That's partially due to the crushing unemployment situation in Berlin-Brandenburg though - who wants to live in a city when you can't find a job? Berlin is bankrupt and can't even afford to get their S-Bahn sorted out properly!

But yes, certainly, Poland has been badly affected by the masses of foreign idiots snapping up off-plan apartments. Can't say I feel particularly sorry for most of the people that have lost money here...

Pooland is NOT a current burst bubble market, market correction maybe. Spain, US especially Florida and Bulgaria know their burst markets, the UK could be pass as a partial burst.

Many areas of The Polish market remain stable, high end large apartments have lost the most thats only one sector.

The bubble didnt burst out YET in poland.

Berlin has an infrastructure and a railways system that Krakow will not have
even in the next 100 years.

Have you been to Berlin lately? You say that city is bankrupt? Maybe it is only the frustration in you speaking. Berlin has about 40 millions tourists each year,

and it is one of the best cities to live in from Europe.
It has low prices, it has great infrastructure, it has lowcost flights to anywhere
in the world.

Krakow will not be at Berlin's level not even in the next 150 years and you know this.

To compare Berlin with Krakow is like comparing Japan with Somalia.

Prices of apartments in Krakow are overinflated due to overspeculation and greed.

It's still not perfect - referring back to the S Bahn problems, the system in Berlin still needs much more investment to even match the standard of London. The saga over U5/U55 is just one example where a badly needed line has only had a short section built because Berlin just doesn't have the money to do anything with it. In fact, with U55 - if work doesn't begin by next year, then they'll be forced to repay quite a bit of cash to the Federal government - and I don't think Berlin has the money to do so.

The fact that Berlin is ran by the SPD and The Left Party isn't going to help things either.


Yep, I've been to Berlin recently. The economic problems of the city are huge - the last data I've found suggest that unemployment is running at around 13.5% as opposed to a German average of around 7%. There's a fascinating article here

wsws.org/articles/2009/oct2009/left-o16.shtml
and those social cuts are going to hit Berlin hard.

Berlin might be very attractive as a tourist destination, but it has very little to underpin it. For ordinary people, Berlin isn't such a nice place - if it was, don't you think ordinary Germans would be flocking there in droves?

I love the city, but it has huge problems - and those problems aren't going to go away. The Federal government has thrown so much money at Berlin and yet the problems won't go away - and I dare this is partially because Frankfurt and Munich are such powerhouses economically.

Just look at the state of many places in the former East Berlin to see - they're throwing money at the problems, yet the problems still remain. The city is bankrupt and no financial commentator will tell you otherwise - if it wasn't so, they would've fixed the S-Bahn problems much, much quicker. The fact that the trains were allowed to get into such a dangerous condition to begin with is pretty telling about the economic situation there.

Don't let Berlin-Mitte fool you!

But you are right about Krakow - the absolutely ridiculous (lack of) integration with Krakow Glowny and Krakow PKS as part of Galeria Krakowska says a hell of a lot about the place.

Absolutely!

It's not good for any city if it has a mayor who developed the slogan "Poor but sexy" and is even proud of it.. What an arsehole!

"Poor but sexy" is a very good slogan. Why everyone who is sexy should be rich?

It is unlikely that the real estate market in Poland will burst in a bubble. Most predictions here are that prices will sooner or later go up as the developpers start very few new projects, so the supply side will become week. I don't believe it to come up quickly as the demand side is likely to remain weak as well. Yet, the financing of mortgages by the banks is growing steadily up.

The polish real estate bubble you can see it at work right now.

Prices of 12-20.000 zloty/sq.m. in Krakow. Of course, no viewings on those properties,
but the greed is at its highs.

Prices will come slashing down and lots of people will finally get a REALITY CHECK ;)

Well, recent data shows that in Wroclaw prices fell 15% from the peak. It is not such apocaliptic colapse when compared to Spain for example, but still it is significant.

Maybe it is good moment to buy, who knows. But in my opinion, probability of soon rebound is highly unlikely, so there is no rush. But for foreign investors current polish zloty weakness could be an encouraging factor.

An article for all you guys:

How to value Polish real estate or any other real estate

Basically the rule of thumb is this. Take the average netto income in any country you live and this is what the cost of a flat should be per square meter. If in Krakow the average is 2000 pln a month. A flat should cost 2000 pln a square meter. Poland has the biggest difference between average wages and prices of flats in the EU. The average person in in the Polish market can only afford a flat with little money down. Speculators are pulling out of the Polish real estate market for greener pastures, i.e. rising price real estate markets, for example Bulgaria and other new land rushes. Now Poland is a hot economy and will stay strong for many reasons, however, the real estate market is a a bubble of ridiculous proportions.