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Poland's apartment prices continue to fall


milky 13 | 1,657
10 Feb 2012 #391
hahah good man Harry
OP peterweg 37 | 2,320
10 Feb 2012 #392
You were well and truly rumbled there Peter, or are you still intending on posting those calculations.
Were waiting

Not likely to do it soon. In the process of suing my employers so I couldn't give a F*** about doing another spreadsheet
pip 10 | 1,659
10 Feb 2012 #393
Harry: But what about the God-given right that everybody has to move into a 300-metre house as their first property?
Name me one country where this happens?? 300 metres???

the us. the bigger the better,,haven't you heard?
milky 13 | 1,657
10 Feb 2012 #394
Pip,you sniffing socks again...
pip 10 | 1,659
10 Feb 2012 #395
you don't think that Americans buy stuff bigger than anyone else? you're joking, right? The whole housing crash in the u.s. started because people bought too big houses for too much money with too little of their own cash.

Luckily in Canada our banking has much stricter regulations so we didn't get hit with the housing crash like the u.s. did.
milky 13 | 1,657
10 Feb 2012 #396
Canada or Poland ,what are you on about PIP<<
pip 10 | 1,659
10 Feb 2012 #397
you asked -name me one country where people move into 300 m2 as their first house. I answered with the u.s.

and then you asked if i sniff socks...

are you deflecting again?
milky 13 | 1,657
10 Feb 2012 #398
no,I simply asked
Anyone got a link for houses prices in Poland for the month of January, 2012 ??
pip 10 | 1,659
10 Feb 2012 #399
I gave you two in Warsaw.
Avalon 4 | 1,068
10 Feb 2012 #400
Pip, you never gave him the link to the new, 5 bed (300m2), detached houses with swimming pool that are on special offer in Warsaw for around 120,000PLN.

He is not interested in the expensive ones.
milky 13 | 1,657
10 Feb 2012 #401
I gave you two in Warsaw.

Data on January 2012 real estate prices Poland.
Wroclaw 44 | 5,384
10 Feb 2012 #402
use this as a guide. check it again in three months: mamdom.com/searchpolishproperty-domy-sprzedam-dolnoslaskie.htm
milky 13 | 1,657
10 Feb 2012 #403
Mamdom hahhaha, I think I'll pass on that one.
wildrover 98 | 4,451
10 Feb 2012 #404
Apart from Milky Mark...is there anyone who actually gives a Donald duck about this....?
pip 10 | 1,659
10 Feb 2012 #405
not really, I just don't like misinterpretations of the market being spread like it is fact and truth.
Wroclaw Boy
10 Feb 2012 #406
Mamdom hahhaha, I think I'll pass on that one.

agreed, that Tim Hill chap is something else.

Some interesting extracts from the man.

So does it mean Polish property has performed so badly? Actually the reality is probably that it has performed a little too well compared to neighbouring countries.

Over the border many foreign investors are sitting in negative equity and those who have borrowed to buy simply cannot sell

So Poland is one of the few countries where buyers can actually sell and get their money out should they need to. Although many who I have spoken to are reluctant to do so.

the rents are affordable to the local population

Around two years ago someone buying an apartment for 500,000 PLN would have needed to transfer £83,000 from the UK. If they sold now for the same price the funds that would end up in their sterling bank account would be £111,000. Now £28,000

I especially like the last FX point, he does fail to mentoin though that you could have quite easily lost 20% depending on the months, the GBP - PLN exchange rate has been volatile for years.

mamdom/polishproperty_blog_entry-472-profiting_on_static_polish_property_prices.php
milky 13 | 1,657
12 Feb 2012 #407
So does it mean Polish property has performed so badly? Actually the reality is probably that it has performed a little too well compared to neighbouring countries.

Thing is about these guys is that they are looking from the perspective of the investor. The bottom,top and middle line is profit; fair enough that's their turf and that's their game, but as a far as the majority of Poles are concerned what he and Co. see as bad the rest see as good.
sa11y 5 | 331
16 Feb 2012 #408
So in Poland paying 10 times your salary for a one bedroom flat, or 15 times your yearly salary for a house

Milky - but that's not what people are paying. You can't take the cost of flat in central Warsaw and compare it to buying power of a supermarket lady.

So let's look at example.
You said that generally as a couple you will be able to get a loan 3 x your combined annual salary.
Looking at Warsaw:
1) 1 bedroom flat in one of the "sleeper" areas (i.e. Bialoleka - still in Warsaw, good transport to the centre): approx 280 000 PLN
2) Average salary in Warsaw: ~5000 PLN (3500 PLN/nett)
- combined income: net 7000 *12 = 84000 PLN/pa
- 280000/84000= 3.33
- So in Warsaw, if you earn the average, you need to work just over 3 years to buy a flat (definitely 10-15 years!)

Looking at London:
1) 1 bedroom flat - East London: 180000 GBP (small flat, full ownership) - this will probably be bigger than the mentioned flat in Warsaw, so let's take 75% of that = 135000 GBP

2) Average salary in London: ~33000 PBP pa (21000 net)
- combined income: net 42000 GBP/pa
- 135000/42000 = 3.21
- So in East London if you earn average salary for London, you also need to work for just over 3 years (in fact as there is not enough small property, you would need to work more than that - perhaps that's why they came with idea of shared ownership)

Johannesburg (Edenvale - where I live)
1) 1-bedroom flat: 700000 ZAR - difficult to come by, properties are big here...
2) Average salary in Johannesburg: ~240000 ZAR/pa (155000 net)
- combined income: net 310000 ZAR/pa
- 700000/310000 = 2.25
- So in Johannesburg you need to work just over 2 years to afford a small flat. And even South Africa has recently been accused of having property bubble because property prices doubled in 5 years.

South Africa - low cost housing, targeted at lowest income group (they will probably make 100000 ZAR/year of combined income. You can buy a "match-box" house for 200000-300000 ZAR - so even in case of the lowest earning population the ratio of paying ~ 3 x combined annual income works.

My calculation has limitations - I took that the household income is a double of individual averages that is a generalization in the first place. But the bottom line is - that if there is a gap in the market, it eventually will get filled.

Poland has problem with low cost housing (not enough). So the assumption is that while the new properties will be probably in the same range as property in the rest of Europe, the old, small post communist establishments will lose value.

The economic situation in Poland changed since it joined EU and property price increases are linked to that rather than the bubble.
OP peterweg 37 | 2,320
21 Feb 2012 #409
a) Source for the claimed fall being between 11.5% and 17.5%? Or do you not bother with sources?

Using these figures
milky:
2009: 0%
2010: -3%
2011: -5%
2012: -4% to -10% (predicted)

Compounded falls to date

2009: 100
2010: (100 *0.97)=97 = -3%
2011: (97*.95)= 92.15 = -7.85%
2012: (92.12*.96) = 88.464 = -11.536%. (For a estimated fall of 10% its 82.935 = -17.065% -opps my mistake)

This is the source of the real fall of 11.5% to 17.1% fall from 2009 to end 2012

Adding inflation, assuming 4% average as I did..

2009: 100
2010: (100 *0.97)=(97 *0.96)=93.2 = -6.88%
2011: (93.2*.95)= (92.15*0.96) =84.92544= -15.07456%
2012: (84.925 *.96) = (88.464*0.96)=78.2672855=-21.7327145 %
(For a estimated fall of 10% its (82.925 *0.9) = 73.37558016= -26.62441984%

However, Inflation is variable, so here it is with approx inflation numbers from here
tradingeconomics.com/poland/inflation-cpi

2009: 100
2010: (100 *0.97 *0.965)=93.605 = -6.395%
2011: (93.6 *.95 *0.9725) =86.47931938= -13.52068063%
2012: (86.479 *.96 *0.958)=79.53330044=-20.46669956 %
(For a estimated fall of 10% its (86.4795 *0.9* 0.958) = 74.56246917= -25.43753083%

So a more accurate statement. Real fall of 11.536%(for a fall of 4% in 2012) and 17.065% for a fall of 10% in 2012

Inflation adjusted (inflation assumed 4.2% in 2012), this equates to a fall of between 20.5 % (assuming 4% fall in 2012) and 25.4% (assuming 4% fall in 2012) from 2009 til the end of 2012

Inflation adjusted (inflation assumed 4.2% in 2012), this equates to a fall of between 20.5 % (assuming 4% fall in 2012) and 25.4% (assuming 10% fall in 2012) from 2009 til the end of 2012.

Corrected.
Harry
21 Feb 2012 #410
Nice try.

However, your original post was:

The fall in absolute numbers has been 11.5-17.5% so far. With inflation the fall has been to 24.7% to 29%.

Has been so far, i.e. has already happened, so you need to base your calculations from 2008 to 2011. Given that you made your statement on 24 Jan 2012, you cannot factor in assumed falls in 2012 into a statement about what has happened so far.

Why might you want to factor in 2012 projections? Well, the numbers which milky gave and which you work from show

2008: +5%
2009: 0%
2010: -3%
2011: -5%

And you were challenged by me:

b) Given that inflation in Poland since 2008 has varied between 2% and 5%, perhaps you could present a calculation showing how that interest rate causes a fall of 11.5% to become a fall of 24.7% in just three years?

So, let's do your calculation again using those figures:
2008: +5%
2009: 0%
2010: -3%
2011: -5%

Compounded falls to date
2008: 105
2009: (100 * 1.00) = 105
2010: (105 *0.97)= 101.85 = +1.85%
2011: (101.85*.95)= 96.7575 = -3.2425%

So the real fall over those three years is -3.2425%

I'll let you add in inflation to those figures, am sure that you can get it to the 24.7% to 29% you're claiming have happened so far.
OP peterweg 37 | 2,320
21 Feb 2012 #411
So the real fall over those three years is -3.2425%

Useless.

Thats fouryears.

We were discussing falls from peak. Why would you include a year before the peak? its simply irrelevant and idiotic, quite frankly.

You also ignored inflation.

If you want hard numbers, -13.5% fall from peak at the end of 2011 is undeniable.
Harry
21 Feb 2012 #412
We were discussing falls from peak. Why would you include a year before the peak? its simply irrelevant and idiotic, quite frankly.

The original statement was "since 2008". But let me humour you, let's go from 2009 and for three years. Again let's use the figures which you want to use (i.e. the ones linked to in my post above):

2009: 0%
2010: -3%
2011: -5%

So the compounded fall would be:
2009: (100 * 1.00) = 100
2010: (100 *0.97)= 97 = -3%
2011: (97*.95)= 92.15 = -7.85%

If you want hard numbers, -13.5% fall from peak at the end of 2011 is undeniable.

Er, your figures show that it is actually 7.85% without inflation.

You also ignored inflation.

I actually said "I’ll let you add in inflation to those figures".

But we can just use the figures you have already given above:
2009: 100
2010: (100 *0.97 *0.965)=93.605 = -6.395%
2011: (93.6 *.95 *0.9725) =86.47931938= -13.52068063%

Hmm, so not even the figures which you yourself put forward support your claim that "The fall in absolute numbers has been 11.5-17.5% so far. With inflation the fall has been to 24.7% to 29%." In reality the fall has been 7.85% in absolute numbers and 13.52068063% with inflation, a fact which you have been nice enough to show in your post.

When even one's own calculations disagree with one's past statements, it is usually a good idea to correct one's statements, wouldn't you say?
OP peterweg 37 | 2,320
21 Feb 2012 #413
I showed the the figures I used to perform the calculation, thats what you asked for. I modified them to take into account real inflation.

Er, your figures show that it is actually 7.85% without inflation.

And 13.5% with

If you want to dispute those figures or change the basis, fine but don't be complain that the results are different when you do so.

I shouldn't have said 'so far'when including the 2012 estimate, that was wrong on my part. I guess inflation could be below 4% and prices could rise this year. NBP estimates 3.25% for 2012.
milky 13 | 1,657
21 Feb 2012 #414
So any results for January sales?
I read yesterday that there are over 50.000 unsold apartments in the main 6 cities.
Also banks refusing mortgages unless couples have a joint income of 8000 zloty, net a month.
Harry
21 Feb 2012 #415
As usual, source or it didn't happen.
OP peterweg 37 | 2,320
21 Feb 2012 #416
More importantly..

Wages in Poland's private sector grow 8.1 percent

The average wage in Poland's private sector rose by 8.1 percent year-on-year in January, well above market forecasts of 4.9 percent, and significantly more than in December, when wages grew 4.4 percent, according to the Central Statistical Office.

"It is difficult to explain what the source of such a substantial acceleration of wages was without detailed data, but in our view this may be due to payment of bonuses or wage rises in a big company and (only partially) to [a] hike of [the minimum] wage, which jumped from zł.1,386 to zł.1,500 in January," Bank Zachodni WBK analysts wrote in a market report.

Employment growth in the private sector slowed to 0.9 percent year-on-year in January, from over 2 percent y/y a month earlier. In January 2011, the figure stood at 3.8 percent y/y, showing that there has been a substantial slowdown in the Polish labor market, according to BZ WBK.

wbj/article-58115-wages-in-polands-private-sector-grow-81-percent.html
BRS 2 | 48
23 Feb 2012 #417
28 m2 doesn't sound so bad compared to 78 sq ft in New York

ca.shine.yahoo/manhattan-s-newest--smallest-apartment---architect-lives-in-78-square-foot-abode.html
milky 13 | 1,657
23 Feb 2012 #418
This is just one guy of about 20 years of age. Paying 750 $ when the average wage in New York is 935$; not so bad for a classy place like NY.

28 m2 doesn't sound so bad compared to 78 sq ft in New York

In Poland(in sh1tholes cities) there are large families of 4 and 5 living in 50 m apartments. That is bad.
Avalon 4 | 1,068
23 Feb 2012 #419
And if you took away their mobile phones, 40" televisions, cable subscriptions and cars, it would be a lot worse.
pip 10 | 1,659
23 Feb 2012 #420
In Poland(in sh1tholes cities) there are large families of 4 and 5 living in 50 m apartments. That is bad.

Poland doesn't have the same issues with space as the western world. This is not outrageous to live in an apartment of 50m with two kids a dog and the mother in law.

In fact, I have a friend who grew up in the blocks in Warsaw Ochota in a two room apartment with a kitchen. the family all slept in one 20 m2 room and the babcia slept in the other. That is 5 people in less than 50 m2 space.

Even now that he makes good money he bought an apartment- during the peak so he over paid grossly, in Mokotow, Warsaw- in a low rise block and the place is only about 65 m2--two kids.

I couldn't live like that but many people can.


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