Poland's apartment prices continue to fall

Prices will also fall if people can't afford to buy either.

Was reading in an article/survey) that one third of Poles are not able to spend over 150,000 zloty.. and only 13% willing to pay over 300,000 zloty

milky:What sort of mortage deal are available in Poland.

Earning multiple, interest rates, deposits. I only see the main banks offers, which i assume are not the best

I beleive that if you own the land, no deposit is required

Not sure. I will look into it. Interest on zloty loans are higher than euro. The only reason people could afford the sky high 2004-12 mortgages was because of the grant and 40-50 year mortgage.

eventually perhaps, the Poles are a stubborn bunch when it comes to reducing property prices, reducing to them is an alien concept. Lets face it pretty much any other country would have seen a major crash in property prices had they experienced something similar. The market has been basically stagnant (at best) for 3 friggen years now, and only small decreases in comparison.

Basic property boom/bust traditions do NOT apply in Poland.

worth repeating because some just don't get it.

We had a boom and now there is a crash.
Whats different?

because there is no crash it is a leveling out. big difference.

/thread

You describe the gradual reduction over the past 3 years as a crash? Whats Dubai, property armageddon?

Yes.
Was that a question?

gone down from 2008 peak prices
32% Lodz
9.9% warsaw
Gdansk 22%
Poznan 25%

and this year going down an average 1% a month

It is crashing in slow motion

Just came across this post from the middle of last year - someone was asking about buying. I think it's true to say prices have dropped but unfortunately not by enough yet, not in my opinion. So either the wages have to rise or prices fall or if Poles abroad are supporting prices then those Poles' purchases or market support need to be lowered.


https://polishforums.com/real-estate/thinking-buying-offplan-luxury-property-wroclaw-20037/

internationalresidence.ru/eng/news/5844.html

Houses in Warsaw have lost 13.63% of the value since the economic crisis began, while in Kraków prices are down by 17.87% and by 25.22% in Tri-City.

true

Prices in Warsaw increased by 23% in 2005, by 28% in 2006, by 45% in 2007 and by 13% in 2008, and some cities saw even larger price rises. EU membership encouraged foreigners to buy property in the country, even though they are limited to only one home each, and it also encouraged Poles working abroad to send money home.

true

Although the Polish property market is now seeing a price correction, it may be largely protected due to the fact that its economy is still growing and unlike most of Europe is less likely to suffer from a double dip recession.

untrue and a contradiction of what was already said. The polish Economy simply,did not drive up the prices. As article says

EU membership encouraged foreigners to buy property in the country

encouraged Poles working abroad to send money home.

Why do so many articles "end" with the same useless optimistic jargon that prices will remain high?? The same clowns have been saying in Ireland every month since late 2007 that the prices have bottomed out. Before that it was all about a "soft landing"..

So, according to the figures you are providing, prices rose between 2004-2008 to peak at an increase of 109%


This still leaves a nett increase of 95% since 2004. (Quite mild considering you were quoting rises of 300%)


Lets say that the 1% fall each month continues, in just under another 8 years, we should be back to 2004 prices.

These are your figures Milky, I am sure that you and others will want to make some adjustment for inflation etc, but, at the end of the day, your prediction in 2009 of a 60% crash is not looking any better.

If the Euro collapses and there is a depression or maybe war breaks out across Europe, the crash you predict could still happen.

I personally will just get on with life as normal. The thought of waiting for quarterly housing sales figures for the next 8 years sounds depressing.

Avalon.

You, and everybody else for that matter, really must learn how to calculate compound interest


No, its an 258% increase based on Milky's figure. You don't add the rises, you multiply. Here

1 x 1.23 =1.23
1.23 x 1.28= 1.5744
1.57 x 1.45= 2.28288
2.28 x 1.13= 2.579

so 257.9%


Again you multiply the annual falls by the previous year/months figure

1 x 0.99= 0.99
0.99 x 0.99 = 0.9801
0.99 x 0.9801 = 0.970299
0.99 x 0.970299 = 0.96059601
0.99 x 0.96059601
etc for 12 months
.
.
end of year fall = 0.886384872

Which is 11.36% fall per year. Calculator..
stoozing.com/mon2yr.htm

To get back the 258% rise it would have to fall from 3.58 (100%+258%) to 1, so a fall of 72% (2.58/3.58=0.72)

at 1% fall per month, 11.36% per year APR, it would take about 11 years to fall 73% to lose the 258% rise.

However, this ignores inflation. If you assume 4% inflation from 2004, by 2017 the inflation adjusted price would be 170% up. So you would need a fall of (1.88/3.58=0.53) 53% which should come in 6 years.

Inflation target and actual is probably less than that, so the actual date would be 7 or eight years... 2019-2020

The prices are dropping at about 1% a month, but from this May with the "grant" gone, the percentage will probably be 2 or 3% per month, especially in the in the winter months to March 2013.

I originally, due to the language barrier thought that the grant was gone from Jan 2012 but its actually may.

I was using Milky's own figures. It makes no difference, the results virtually the same, , so anyone that bought prior to the financial crisis is not going to see negative equity for some time. To get around this problem, Milky, will now predict price falls of 3% a month.

Anyone got the house price falls for yesterday?

The difference is your understanding the figures are calculated. You could get screwed if you don't understand it. 95% and 258% is a big difference in numbers

If prices fall at that level then its obviously significant. They fell 4% spain, so its quite possible.

In Places like lodz prices are just a few percent of 2004 prices, already.


No, I stated it with facts.. The Family in their own home grant' is gone from this May.
So obviously this will heighten the downfall in prices. Government won't give 40-50 year loans. Interest is going up on mortgages. banks don't give mortgages over 200'000 atm ,,,and The average Pole cannot afford over 150000...

All these fact+Poles in the West- loosing their jobs,getting pay-cuts,will bring prices down.
Its true that the property bubble in Poland does not follow the rules of other countries that's because the Polish bubble was largely driven from Poles abroad and foreign investors.

The Irish bubble for example, was driven by Irish wages, that's why their was a sudden collapse . Poland on the other hand is an unusual situation, largely influence by the happenings in the west;especially in relation to the Billions been sent home by Poles since 2004.

Well thats your opinion. The fact is Poles are still sending about the same back and prices are falling. So I'd say it banks not lending causing the crash, one they restart prices will recover.

And Ireland's crash was caused by bank lending not wages.

what a load of crap.

fact is there is no way you can measure "billions been sent home by Poles" --do you have a link for this nonsense.

Polish immigrants in Ireland have sent home an astonishing $7.5billion in wages since they arrived to work at the height of the Celtic Tiger boom seven years ago.

irishcentral.com/news/Polish-people-working-in-Ireland-sent-home-16-billion-last-year-133798773.html

Polish people working in Ireland sent home almost €1 billion ($1.6 billion) in 2009.

Poles working in the UK sent home an estimated £1.8billion last year.

Money Downing Street hoped might be ploughed into the British economy is instead financing a property and consumer boom in Poland.

Read more: dailymail.co.uk/news/article-506148/Poles-working-Britain-send-home-record-1-8bn-families.html#ixzz1vQhnzWAx

Poles working abroad sent back EUR 4.2 billion in 2010 - says a daily newspaper "Dziennik Gazeta Prawna", referring to data released by the Polish National Bank. This year's transfers appear to be at the record level.

The key factors are: opening the German labour market, improve the business climate in the West and increasingly better situation on local labour markets. As a result, foreign transfers to families back in Poland can break the record of 2007, when EUR 5.2 billion was sent from abroad to Poland.


yes, but the bubble was created by the above reasons.


Nonsense Peter. Unlike Poland it was driven by the increase in wages. Bank lending played a significant part but.....
Average house price Dublin
1998 160,699 125,302
1999 193,526 148,521
2000 221,724 169,191
2001 243,095 182,863
2002 256,109 198,087
2003 291,646 224,567
2004 322,628 249,191
2005 350,891 276,221
2006 405,957 305,637
2007 416,225 322,634
2008 370,495 305,269

Average wage Ireland
1996 avnhp: €87,202.00 , avindw: €20,692.2 , ratio: 4.214
1997 avnhp: €102,222.00 , avindw: €21,377.6 , ratio: 4.782
1998 avnhp: €125,302.00 , avindw: €22,868.6 , ratio: 5.479
1999 avnhp: €148,521.00 , avindw: €24,165.5 , ratio: 6.146
2000 avnhp: €169,191.00 , avindw: €25,786.0 , ratio: 6.561
2001 avnhp: €182,863.00 , avindw: €27,919.0 , ratio: 6.550
2002 avnhp: €198,087.00 , avindw: €29,872.1 , ratio: 6.631
2003 avnhp: €224,567.00 , avindw: €31,513.5 , ratio: 7.126
2004 avnhp: €249,191.00 , avindw: €33,338.3 , ratio: 7.475
2005 avnhp: €276,221.00 , avindw: €35,277.5 , ratio: 7.830
2006 avnhp: €305,637.00 , avindw: €37,477.1 , ratio: 8.155

Your own figures show the HP to wages multiple went ballistic, 8:1

Thats 100% bank lending. Average in the UK is from 2.8-4. In the boom I think it peaked at 7.

Well,In Ireland, wages tripled and so did house prices.
Since 2004 polish property prices triple but did Polish wages?

1996 avnhp: €87,202.00 , avindw: €20,692.2 , ratio: 4.214
.
.

2006 avnhp: €305,637.00 , avindw: €37,477.1 , ratio: 8.155

I don't know how your maths works, property doubled in relation to wages

Considering posts earlier on in the thread I thought the below may be of interest:

Polish emigrants transfer less money to Poland

When in 2007, over 2.2 million Polish citizens lived abroad money transfers from other countries to Poland reached a record level of zł.25 billion a year, which amounted to

2.5 percent of Poland's GDP. However, since then the transfers amount has been declining. Experts from Adam Smith's Center (CAS), who studied the influence of

emigrants' transfers on the Polish economy, say the decline is, for the most part, the consequence of the financial crisis, which impacted the labor market affecting Polish

emigrants especially in Great Britain and Ireland. As a result, in 2008 money transfers from abroad dropped to zł.20.6 billion. "The transfer dynamics have been falling due to

people returning from emigration and families reuniting abroad," says Ireneusz Jabłoński, board member of CAS. In 2011, the value of transfers to Poland is estimated

at zł.17 billion, which constitutes 1.42 percent of the GDP. Experts predict that the amount may remain the same in 2012.
(Parkiet, p.9) AS

Correct me if I am wrong haven't UK house prices declined the last quarter?
market realignment, plus the Euro is wobbly and the zloty really weak at the moment.

anyone got the real estate prices for May????

Why dont you look at the link I gave you last month and the month before?