Poland's apartment prices continue to fall

No. The OP was trying to be misleading. Nowhere in the artical does it mention housing. Anyone who knows anything about real estate would not get it mixed up with civil engineering, both construction but entirely different fields.

It is not my intention to be misleading many of the companies featured in this article are involved in commercial/civil and residential.

Foreign builders are lured by the fastest forecast growth in the European Union. While the pace of Poland's gross domestic product declined to 2.4 percent in the second quarter from 3.5 percent in the previous period, the economy, the only one in the EU to avoid a contraction during the global crisis, will expand 2.7 percent this year, according to the median estimate of 31 economists surveyed by Bloomberg. (Check the numbers in the BRE report below)

It's a far cry from 2010, when Poland was preparing to co- host the European Championships, the world's second-biggest soccer event after the World Cup. The EU funds were used to triple the length of Polish highways and builders were reporting record profits. The combined net income of Budimex, Polimex and PBG rose to a record 563.1 million zloty in 2010. ( The party is over)

By contrast, the combined loss for the first half of this year was 2 billion zloty. Only Budimex reported a profit, of 22.1 million zloty. Their net debt stood at 3 billion zloty at the end of June, an increase from a level close to zero in 2009. ( what did you say about Spanish who own 59% of Budimex, they are not in for the short term Harry,Ferrovial has now implemented a programme allowing Polish workers to work in Spain for at least a year to learn EU standards.)

While PBG, Polimex and their smaller competitor DSS SA (DSS) failed to pay back their bonds, the yields on Polish government five-year notes fell to a record low of 4.2 percent last week. The cabinet is cutting the budget deficit and investors are speculating the central bank may cut interest rates.( Forgone conclusion)


Harry, the story is Polish builders are going bankrupt or having to venture outside of Poland because of foreign competition in Poland and lower margins, the Spanish are ruthless they will build on a near zero profit in either residential/civil/commercial they don't care and Polish company's don't seem to understand the rules of the current market trend. Take into account the quote from BRE bank ' Poland will enter recession in H1 2013'.

brebank.pl/images/BreKorpo2/Portal/BinaryPL/3593908/brewr_2012_11_02_3593908.pdf

From the latest news release on Warszawa real estate only Śródmieście prices are holding up the rest of Warszawa is dropping and will almost certainly see further lower prices 2013.

Is it true that the people of Warsaw -- mostly people who have moved there from other locations -- are quite unfriendly and stare at strangers? If I want high property prices and unfriendly locals, I can more easily move back to London.

And yet they need financial help from the EU?

Absolutely ridiculous in every sense of the word, don't you think?

And who is going to finance the Spanish developers? Spanish Banks?, Polish Banks?. If the economists and the banks could predict the future, Europe would not be in this mess.

Greece needs the next tranch of the bailout (31 billion Euros) or they will be bankrupt, estimated wealth of hidden Greek money in Swiss banks is 170 billion Euros. Nobody knows who is lying and who is telling the truth and I certainly would not trust the banks or the governments to tell the truth.

You lived in Spain and should know Ferrovial, who has partnered them in their international expansion. Then ask yourself who bought WBK, banks are in the business of doing business ( right or wrong) they stick within the rules which governments set.


Europe is in this mess, because of debt, debt is the drug of the masses, banks and financial institutions have peddled it well. That is what they do they sell financial instruments, unfortunately people believe they just take in deposits and give out interest, they are a business and must make money. All of those people who bought second homes on credit or refinanced where/are all greedy, there is a disclaimer at the bottom of every financial contact which states' Prices can go up as well as down, we suggest you seek the advice of a qualified financial advisor ' How many people just signed before discussing their position with a qualified financial advisor.


Citigroup, called Greece would leave the Euro in 2013 in Feb this year, I believe most people would agree if Greece has to go in order to create Euro-2. Then let them go, they are and should have been responsible for their own fiscal policy. Stick to the rules or leave.

And if you believe that, you must also believe in Santa Clause and the tooth fairy.

the Federal Reserve are well above any earthly government!!

They have the leading lawyers, tax advisors and accountants advising them.

Someone created a good business model based on Santa Clause and people are buying into it. As for the ' tooth fairy' it has not been packaged that well, so there could be a niche.


Don't get WB started.

A scary amount of people, I think. I bought a flat last year instead of a house for exactly this reason - I know that it won't be a problem to make the payments on the flat regardless of what happens, but buying a house at this point was far too much of a risk.


Totally agreed. But then again - even the Germans were breaking the Euro rules at some point...

I don't think the Euro can survive in the long run without proper financial oversight and rules in place.

I would much prefer to have Euro/second phase than the Euro being phased out, which would set Europe back 15 years and straddle many EU 27 members with much unwanted debt. If Europe wants first-class infrastructure and a comprehensive welfare state without piling up ever more debt, governments need to shake up working habits to generate the growth that spins off tax revenues. Everyone in the EU27 will have to suffer lower living standards or higher taxes for at least the next decade to fix the problem. The only solutions they have is ' tax ' or 'infltate'. The main issue I have, is why should I suffer a low interest rate economy, just because some individuals exceeded their comfort zone and stuck in on the lottery.

Its managed to survive 1/3 of its life in total crisis. I wouldn't be surprised if it carried on for a very long time.

Poland is also feeling the effects of completing a host of expensive road and rail projects ahead of the European football championships in 2012; the pace of new contracts is tailing off. Large new projects are unlikely to materialise until the next seven-year EU budget is agreed - the current 2007-13 budget provided a €68m injection and the next looks set to be slightly larger.

ft.com/intl/cms/s/0/c1725082-3ef9-11e2-a095-00144feabdc0.html#axzz2EQwWu0HY

MARKET OVERVIEW

Poland’s housing market has yet to recover from the global financial crisis. In the years leading up to it, particularly in 2004 when the country joined the European Union, the tri-city area of Gdansk, Gdynia and Sopot saw steep increases in home prices. The housing bubble popped when banks severely tightened lending standards as a result of the troubles elsewhere, said Kazimierz Kirejczyk, the president of the board of REAS, a Warsaw residential real estate consulting and research firm.

“After 2008, the prices decreased gradually,” Mr. Kirejczyk said. “We can estimate — and it depends on location and type of property — between 15 and 25 percent.”

The market hasn’t rebounded completely and prices may drop further still, said Marcin Plazinski, the associate director of research at Emmerson Real Estate, which has headquarters in Warsaw. Because some property developers anticipated a recovery in 2010 and 2011, they embarked on development projects, adding to the oversupply of housing. Meanwhile, he said, banks have yet to loosen their stringent lending requirements.

“In Gdansk,” Mr. Plazinski said, “home prices fell about 15 to 20 percent from 2008 to nowadays, and we expect an additional 10 percent drop, I’d say, in the following months.”

oh yes. a bubble.

"We can estimate" = We can guess, we assume, we think.

Milky, this man sounds about as reliable as you and your predictions of a 60% drop/crash. Bye the way, how are you getting on with the house hunting?

fact
ober-haus.pl/files/pl/files/en/reports/actual/Ober-Haus%20Polish%20Cities%20Apartment%20Price%20Index%20October%202012.pdf

Are you still a developer?

I have to admit, it would be pretty entertaining to see milky vindicated on this thread. I do seem to be seeing lower asking prices for the area I'm in but I am a casual observer who is taking few notes so let the chips fall where they may.

Hang around for another four years.

but nobody has ever said the prices were not dropping. The issue is that he has been claiming that there is a bubble which is not the same thing as a constant decline.

Funny thing, I have posted a few studies done by experts, like milky has, but mine were discredited because they were from agents which is exactly what he has just posted.

in Piaseczno, which is considered a suburb of Warsaw the prices have dropped to 4100 pln m2--I expect they will level off at 3800 m2. In Zoliborz the prices are at around 7000 m2 and in Powisle they are closer to 9000 m2. It has to do with saturation of the market and the space available to build as well as access to metro--even parts of Wilanow are around 4500 m2.

So once again--nobody has ever claimed the prices were not dropping. clearly they are and have been for a while- but there is no bubble like what milky has been saying for quite some time now.

Is that it?
I would have thought the earning power of people and interest rates would factor greatly in this market but, again, I'm just a casual observer.

In real terms milky's 60% is already here. I won't bother explaining the maths again, see my previous posts.

With a probable recession and increasing unemployement there is a lot more price falls to come


Yeah, its not a bubble if you refuses to define or accept what a bubble is.

Lets call it a catastrophic collapse in prices.
A bankrupting, fall through the floor.
A disaster for mortgage holders.
A cataclysm of the first order.

But not a bubble... so everything is fine.


REAS seem the most reliable source around.

media.reas.pl/en/pr/225325/residential-market-in-poland-in-q3-2012?changeLocale=EN

got a better source?

OK, answer the following questions in the order given:

1) What was the percentage price increase (year on year) between 2004 to the peak in 2008.

2) What is the percentage fall in prices since peak of 2008 (you can allow for inflation).

3) How many homes have been repossessed in the past 4 years as a percentage of mortgage holders.

I am willing to learn from you.

and while you are at it- give us the definition of a bubble.

Those all seem like pretty objective questions. I'm interested to find out myself but
*possible dumb question begins*
"percentage fall in prices" of asking price only, of asking price corrected for inflation, of asking price corrected for inflation compared to earning power, percentage fall in prices of any specific markets or all real estate? I mean the housing sector may take a hit but commercial properties maybe not...I think although those questions are pretty solid it seems that maybe we should be ready to move to specifics beyond that once we get that info....

*possible dumb question over*

1) Don't know. Pretty high, apparently
2) I will have to dig out the spread sheet again. Maybe over the weekend.
3) Don't know, but whats the relevance?


Why is that word so significant to you? Prices rose a lot and are now falling a lot. You all argued over the definition, here's the FT's definition lexicon.ft.com/Term?term=asset-bubble

Taking that, in Poland's case it would be where rental income was failed to provide a acceptable yield compare to house prices. What was the yield - on average - in 2008?

here figures for 2012
globalpropertyguide.com/Europe/Poland/Rental-Yields

And compared to other countries
globalpropertyguide.com/Europe/Poland/rent-yields

So, given that you can get 7% in a bank and holding property in Poland is a reducing value asset, it seems property in Poland is still very over valued if yields are less than 5%

Does it mean then Poland was in a bubble? I have no idea or opinion.

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The result has been that unemployment in November could have inched up to 12.9 per cent, up by a net 0.4 per cent over the month, an unusually fast increase, according to preliminary estimates from the labour ministry. That would put the jobless rate at its highest level since 2006.

"The negative tendency on the job market is not only continuing, it is getting stronger. Weak consumer demand and pessimistic predictions mean that employers are keener to cut jobs than to create them," Karolina Sedzimir, an economist with PKO BP bank, tells the Puls Biznesu newspaper. She estimates that unemployment could hit 14.2 per cent by the end of 2013.

Milky, are you gloating that Poland's unemployment rate will go up?

It requires high quality journalists. I could have written such a report...
Rather than considering that website the gospel when it comes to Polish matters I searched for an independent source for unemployment figures.
Here: epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Unemployment_rates,_seasonally_adjusted,_October_2012.png&filetim estamp=20121130092724

I've linked: Euroatat - The European Commisions website which paints a very different picture to that of your journalists who are badly in need of some investment...

The figures show that in October 2012 Poland has 10.4% unemployment which is lower than the EU27 average of 10.7%.... interesting huh?
Of course these figures are only a fraction of that of the failing ecomies of 'western European' countries such as ~Greece and Spain who both have rates over 25%, and Portugal who has 16.3%...

The central European countries such as Austria, Poland, Germany and Czech Republic aren't doing that bad...
Poland is also enjoying much lower unemployment than many of her neighbouring countries...

Now, I'm not sure what all this means in real terms Milky, but it looks like you will have to wait at least another couple of years before you can buy any kind of property some time soon:D

I find it hilarious that neither Milky, Peterweg nor Foreigner4 could answer 3 simple questions:


If you guys are going to pretend to be some kind of experts on the housing market in Poland surely these should be straight-forward, easy-peasy questions to answer.

As neither of you are - as your following silly answers demonstrate :





Milky couldn't even bring himself to attempt to answer any of the questions...

You guys got owned, LMFAO :D

If anyone can answer those questions it would be useful to know the answers. I'm considering a purchase should I stay here long-term.

Any advice on the issue would be greatly appreciated :D