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Poland's apartment prices continue to fall


OP peterweg 37 | 2,311
13 Jul 2012 #1,261
There is no property tax in the UK, unlike the US. Council tax is not property tax as its not based on a percentage of valuation.
milky 13 | 1,657
13 Jul 2012 #1,262
please stick to topic
InWroclaw 89 | 1,911
13 Jul 2012 #1,263
This seems cheap. Pip, it looks as if you are right about prices for some areas of Warsaw - 5000PLN/m2 unless I am misunderstanding it. Seems realistic in price if not far from Warsaw and not shared ownership.

asbud.com/inwestycja/twoje-osiedle-bialoleka/prezentacja/prezentacja

I'm almost tempted to say bye bye to Wroclaw if the prices are that low in Warsaw.
milky 13 | 1,657
13 Jul 2012 #1,264
and prices have to go down a lot more.
InWroclaw 89 | 1,911
13 Jul 2012 #1,265
And here they might, if Wroc gets downgraded -

Fitch Ratings Agency changed the outlook of Wroclaw ratings from stable to negative. This is warning light for the city - if the financial indicators of the capital of Lower Silesia will not change, the rating may be lowered next year. Changing the rating outlook is for Wroclaw very bad news. The ratings are an assessment of creditworthiness of cities, states and financial institutions.

Avalon 4 | 1,068
13 Jul 2012 #1,266
So Fitch rates Wroclaw above Spain and Italy, must be in big trouble then!!!! That news is going to make all the Polish property sellers drop their prices by at least 90%. Perhaps they will give the houses and flats away to avoid the huge property taxes?.oh, I forgot!!!...there are no huge property taxes.
InWroclaw 89 | 1,911
13 Jul 2012 #1,267
I'm just wondering that if indeed the outlook is accurately forecast as negative in a town or city, that does usually lead to a slump in property prices if unemployment climbs. Anecdotally, people have told me there are few jobs. Without knowing their qualifications etc, I can't say if that's just their viewpoint or fact. I can say there's b*gger-all for me but that's because I have no in-demand quals and don't speak Polish, so the silence was deafening when I made enquiries with employers. It does at the moment look a bit like the prices are going south - but the caveat is whether that's just a summer lull and also might depend on whether the NBP cut rates.

I also read that the gov of Poland were wondering if they should rescue some of the construction sector that's troubled (I'm not sure what sort of construction they're talking about). Interesting crossroads now!!!
milky 13 | 1,657
13 Jul 2012 #1,268
Meanwhile, Finance Minister Jacek Rostowski told reporters that Poland should refrain from supporting troubled builders as they operate in free market conditions.

I agree fock them
cms 9 | 1,255
13 Jul 2012 #1,269
I dont think they will cut rates at the moment - would damage the zloty which is having a real shaky few months. Probably going to be autumn before any rate cut even considered.
InWroclaw 89 | 1,911
13 Jul 2012 #1,270
I hope they don't cut them at all, autumn is no good either.

By coincidence on what I was saying above regarding summer lulls - Gazeta Wyborca Wroc is saying prices have fallen. This is an online translation of a small extract of the article. Not sure if we're allowed to post in excess of this length from a copyright source and machine translating is not something I like to rely on.

In recent weeks, the real estate market attracted only a very attractive offers. An increasing number of apartments on offer and continually declining demand create huge competition between owners wishing to sell their property.

from W ostatnich tygodniach rynek nieruchomości przyciągał jedynie bardzo atrakcyjnymi ofertami. Coraz więcej mieszkań w ofercie i nieustannie malejący popyt tworzą ogromną konkurencję między właścicielami chcącymi sprzedać swoje nieruchomości.

Source and more...
wroclaw.gazeta.pl/wroclaw/1,95327,12124445,Latem_ceny_zakupu_i_wynajmu_mieszkan_sa_nizsze.html#ixzz20W8Jo8r6

It also mentions (if the online translator is correct) prices down 10-15% on negotiation for sales, and 20% down for rentals.
Wroclaw Boy
13 Jul 2012 #1,271
Council tax is not property tax as its not based on a percentage of valuation.

although it is directly linked to the value of a property - in the UK.
PlasticPole 7 | 2,648
13 Jul 2012 #1,272
sorry man you got me confused there,can you elaborate?

When prices are higher, people spend more money. When prices start falling, they no longer have the extra money to spend. This causes economic chaos. It's the flattening of the bubble that causes things like recessions and depressions.
Wroclaw Boy
13 Jul 2012 #1,273
When prices start falling, they no longer have the extra money to spend.

Not really, they only have less money to spend if the interest rate on their mortgages increase.

This causes economic chaos. It's the flattening of the bubble that causes things like recessions and depressions.

Rubbish, negative equity contributes granted - buts thats not the reason.
PlasticPole 7 | 2,648
13 Jul 2012 #1,274
Not really, they only have less money to spend if the interest rate on their mortgages increase.

When housing prices fall, no more refinancing and it's harder to get the value of the mortgage out of selling the house. If it's an apartment, it means the owner will get less each month for rent. If he gets less, he spends less. This has a ripple effect in the economy.
Wroclaw Boy
13 Jul 2012 #1,275
This has a ripple effect in the economy.

Its a small ripple Plastic.

Not many are fortunate enough to own rental property.

You said "economic chaos" i say "hardly". Its more of a problem in the US and UK - leading capitalist economies.
PlasticPole 7 | 2,648
13 Jul 2012 #1,276
So there are no high rise apartment buildings anywhere in Poland?
Wroclaw Boy
13 Jul 2012 #1,277
Price wise? Doenst make any difference in Poland, you cant take Poland's property market and link it in anyway shape or form to recession.

property bubbles lead to short term personal wealth, unless one is savvy enough to ride the bubble ie. buy low sell high it has little significance on the grand scheme.

Bubble's are a byproduct of recession, not the other way round.
Avalon 4 | 1,068
13 Jul 2012 #1,278
I also read that the gov of Poland were wondering if they should rescue some of the construction sector that's troubled

I think you will find that these are "civil engineering" firms. They build/maintain roads, hospitals, schools etc, government projects. The government has a budget, these firms price low to keep getting the contracts, they go over budget and invariably get into trouble. Chinese getting kicked off the A2 motorway ring a bell. The Government brags about saving 2 billion on the tender and then wonders why the project does not get finished. Same with the A4, nobody worked on section between Bochina and Tarnow last year as the contractor had not been paid, a whole year wasted.

There are only a few firms in Poland able to handle projects of this size, you cannot shaft all of them. (as much as you would like to Milky}
PlasticPole 7 | 2,648
13 Jul 2012 #1,279
Bubble's are a byproduct of recession, not the other way round.

Bubbles are by products of housing booms.
Wroclaw Boy
13 Jul 2012 #1,280
yes, fueled by growing economies, shrinking economy = decline in property prices. Except in Poland, well......for the moment anyway.

downgrade in economy = deflating/burst bubble, except in Poland...for the moment anyway. Its hard to attach this to Poland considering the billions of EU money poring in.
InWroclaw 89 | 1,911
13 Jul 2012 #1,281
I think you will find that these are "civil engineering" firms.

... I haven't a comprehensive list of who is who, but PBG (as mentioned in the article above*) do have a residential construction division ...

...
Sports facilities
high-rise buildings
Flats
Houses
Shopping
Salons ...

*"Poland could support insolvent builder PBG via PLN 385 million"
Wroclaw Boy
13 Jul 2012 #1,282
do have a residential construction division ..

Is it substantiated?
Wroclaw Boy
13 Jul 2012 #1,284
You should apply for a job at google.
google.com/jobs/students/emea/spotlightwroclaw
OP peterweg 37 | 2,311
14 Jul 2012 #1,285
although it is directly linked to the value of a property - in the UK.

Very loosely.

In some US states its 8% per year, council tax on a average million pound house is no where near £80K and trivial in comparison. In fact council tax is based on bands - so rising house prices do NOT increase he tax you pay as all prices rise together. You pay more RELATIVELY than a cheaper house but the absolute amount is always approximately the same and doesn't rise and fall with prices.
Avalon 4 | 1,068
14 Jul 2012 #1,286
I haven't a comprehensive list of who is who, but PBG (as mentioned in the article above*) do have a residential construction division ...

It would not make any difference if they were losing billions on the civils That's where you are talking about huge amounts of money.
cms 9 | 1,255
16 Jul 2012 #1,287
So a few months ago you were saying no developers were going bust but now that they start to go bust you say they were the wrong kind of developers. Let me guess, Poland is different :)

In fact PBG's housing operations are not massive, only 8 developments, but neither are they tiny.

Nobody picked up on yesterday's Gazeta Wyborcza article showing not only good data on falling asking prices and real falls compared bto inflation but also that the gap between asking prices and achieved is now getting very wide - a 9% difference for a 2 room place. In some towns then really big differences e.g a studio in Wroclaw 18%, in Warsaw 14%. (in Gdansk bizarrely its 2% higher !).

Dont worry, its just a levelling out.
pip 10 | 1,659
16 Jul 2012 #1,288
I don' think anybody said that there were no developers going bust. The crap ones will always continue no matter what the economy.
InWroclaw 89 | 1,911
16 Jul 2012 #1,289
Nobody picked up on yesterday's Gazeta Wyborcza article showing not only good data on falling asking prices.

Thank you for posting another tip off about newspapers indicating falling prices, it's appreciated! I couldn't find it, an article with a likely title led to a story about investors buying property in Poland

But this article, about developers "quickly slashing" their prices, I did find:

Google translation: The prices at which transactions are ultimately in the case of two-bedroom apartments are on the lower prices of offers to sell an average of 13.85 percent. - mówi Bernard Waszczyk z Open Finance . - Says Bernard Waszczyk of Open Finance . - Najmniejsze różnice zanotowaliśmy, podobnie jak w poprzednich miesiącach, w segmencie mieszkań trzypokojowych - 9,47 proc. - The smallest differences were recorded, as in previous months, three-bedroom apartments in the segment - 9.47 percent. Osoby przymierzające się do zakupu kawalerki albo dużego mieszkania, liczącego co najmniej cztery pokoje, także mogą liczyć, że wytargują średnio ok. 12-13 proc. People trying on the purchase of studio or a large apartment, which consists of at least four rooms, also may expect that wytargują average about 12-13 percent. - dodaje ten analityk. - Adds the analyst.

There is a link in the GW 'Economy' section translated to English as "Polish real estate market feeling the pinch"

In the first half of 2012 . The real estate market in Central and Eastern Europe concluded investment transactions totaling nearly 2.1 billion euros, of which Poland accounted for up to 854 million - announced advisory firm CBRE. The largest contract in the region was the sale of ING Real Estate Development Warsaw Golden Terraces shopping center . AXA Real Estate and CBRE Property Fund Central Europe paid for 475 million euros.

- but it loads the investors story described above if clicked.
cms 9 | 1,255
16 Jul 2012 #1,290
I don' think anybody said that there were no developers going bust.

Avalon has said that on many occasions somewhere in the depths of this thread.


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