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Poland's apartment prices continue to fall


Stachu
1 Oct 2014  #1,801
Prices are said to drop up to 50% after the Euro will be introduces in Poland- Wait a year or more. There will be bargains.
InWroclaw 89 | 1,915
1 Oct 2014  #1,802
The guy is looking to buy one rather than to sell plenty, and seems quite frustrated (as do many) with the unusual real estate market in PL.

I'm close to giving up, Jon, I really am. I'm thinking of just renting on. Or maybe I'll move to another city with a better choice. Sigh.

That's an interesting question! Reading his posts, albeit vaguely, I had an impression that he is trying to buy an appartment (or a house) for himself.

Yeah spot on (although a house would be better as decent flats are very expensive on the monthly charges usually).

Prices are said to drop up to 50% after the Euro will be introduces in Poland- Wait a year or more. There will be bargains.

Well, try telling the sellers that here. They and the agents behave like buyers are 10 a penny. It's so seldom that an agent tries to stay in touch or offer me something else when I don't buy the first one they show me. And if I don't buy the second, I can definitely forget it! They probably block my emails after that! :)

I ain't kidding. I have never seen such disinterested agents anywhere ever. It's like they are giving up or have a million other buyers. One agent had the phone always ringing and she was speaking in English to buyers who she said were Indian people. So I can only guess foreigners are buying stuff and don't care about the prices, but I do and I feel the prices are based on credit availability rather than wages and sustainable real incomes. But what do I know - that didn't stop the UK which is well over 2007 peak in some areas or so the news tells us.
Korte1
1 Oct 2014  #1,803
they don't have buyers. it is just in the polish culture to not spam/annoy you with phone calls or emails.

you should do your research alone, real estate agents will just charge you 3% extra and do not much for that anyways
InWroclaw 89 | 1,915
1 Oct 2014  #1,804
Yeah but they promised to spam me :) They asked what I am looking for and promised to send me stuff. Only about 1 in 10, perhaps less, bothered. I actually put a written offer in to a dev in proper Polish a while back (by hand and email) and they totally ignored me! Not the first time. Think I was too low? Well, just 6 months on and the price I offered is within a couple of percent of the prices they're now advertising. Yet did they now contact me and say OK or come up 2% and we'll boogie? No. Not a word.

I strongly recommend that sellers either should sell directly or do test phone calls and emails to their agents and pretend to be buyers, to see if the agents bother much. If I ever buy here and then need to sell, I know exactly which agents to use but I'd still test them in case they'd gone downhill. And there are only 2 or 3 I'd thumbs up at most.
frd 7 | 1,399
1 Oct 2014  #1,805
I hope they'll start falling faster, a 90 sq meter apartment at a secured complex is still very expensive for me ;/ considering moving to UK for like 2 years to gather some money for the flat...

which is funny considering I've moved to Wrocław to earn more ;o
InWroclaw 89 | 1,915
1 Oct 2014  #1,806
The price of flats is all the more remarkable when you consider the czynsz (monthly service charge) on many of them. I was looking at renting one in Klecina today. The charge per month is stated as 1070 zl in addition to the rent and electricity. This is a rental of 1500 zl per month, 2-room. Landlords or owners now also have to pay tax on their parking spaces or garages - I have been told this charge has risen by a factor of 10 in recent years and that's why the czynsz is so high on flats with parking. I have no real way of checking, but that's what I was told.

Take a trip to the smart blocks and the smart houses and the residents seem to be ordinary retired people or ordinary working and waged people (on Polish incomes). I could be wrong, but considering those 'better' flats are now US$800 tys. and houses are US$2 M it's hard to imagine that they would have been able to buy at today's prices. If so, this city must have a very high proportion of wealthy individuals given how many expensive blocks and expensive detached and semi-detached homes there are. It must rival Knightsbridge!
f stop 25 | 2,514
2 Oct 2014  #1,807
or, they simply do not move around much and pass their places down to their descendants? Maybe they list it just to see if they sell and then decide to keep it in the family after all.
jon357 64 | 14,382
2 Oct 2014  #1,808
Maybe they list it just to see if they sell and then decide to keep it in the family after all.

That rings true. So many people have told me they have an empty flat to sell but don't seem to really try to sell it.
10iwonka10 - | 401
2 Oct 2014  #1,809
Not a big novelty. It happens in UK a lot...
InWroclaw 89 | 1,915
3 Oct 2014  #1,810
Area and indeed street where there are 2 or 3 new blocks under construction in addition to several already completed recently and a few years ago.
As you can see, the developer has sold almost all:
dewelopart.pl/inwestycje-realizowane/scalino/znajdz-mieszkanie/#

I would have thought the number of blocks of flats being built in that area would result in serious over supply and yet we see they appear to almost all be sold in the link above. There are more blocks yet to be built there I believe, and it will be 'interesting' to see how the area copes with what will surely be a tripling or quadrupling of residents. The only conclusion I can draw is that there is a large drain from smaller towns and rural areas to the cities, and somehow they have the money to buy. Whether that's the MDM programme or other means I have no idea. Of course, if might also be foreign investors or local landlords, not forgetting Poles abroad buying with money they made in the UK etc. I have been very surprised at the sales. Some other estates not far away although perhaps a little more expensive still have empty units from having been built several years ago, however. Those empty units are not always over the size limit of MDM. Some developers have slashed prices on their last few units to shift them, not all have yet been offloaded.

Maybe they list it just to see if they sell

Perhaps.

This past week saw me get my Polish speaking helper call 3 agents about 3 different properties, 1 listed in July and the other 2 in the past fortnight. All 3 agents failed to call back with appointments or any contact at all. 1 of the agent's main offices said to book the viewing via the specific agent's mobile phone. But that agent simply didn't answer his mobile phone nor reply to an SMS. The other 2 agents said they'd call back with appointments but didn't call back at all. The last 2 also ignored emails that I sent in Polish. Going back a few weeks or months, I recall one place that I tried to see 3 times. Each time the agent said they'd call back and never did. The first call was when the property was fresh to market, the second a week later, the third when it was relisted as still available. I have no real idea why it's supposedly for sale when they don't even let anyone see it :D

This is by no means unusual. Same thing happened a week or two ago with 2 other places in the same street with 2 separate agents. 1 place then disappeared from the listings and the other remains for sale to date, officially at least. Never heard back from 1 of the agents, the other agent made contact after 2 phone calls and 2 emails and just asked for my phone number which I had already supplied twice, in fact he only needed to look down the page for it. Hopeless. And yes it was the right number and my phone works fine.

Not far from the almost sold out estate mentioned in my above post yesterday, I note from Gumtree today there are 4 or 5 nearly finished flats on the market via an agent on behalf of the developers. The ads suggest a 2 to 5% price reduction on the flats because the price in the ad text does not match the main price in the ad. Unless of course the agent increased the amount in the text but forgot to amend it in the price field! This is a very recent change. So, it's quite a mixed picture. My general impression though is it looks like prices continue to drop in actual fact on many secondary and some new ones too it seems. But that said, most of the new ones do seem to be sold already, whether at full price or a discount I can't know.

Unless I'm misunderstanding it, this newbuild house in a village near Wrocław has been reduced in price by 15% (check difference between price in ad text and price field)

(assuming price field is updated after ad text!)

olx.pl/oferta/dom-krzykow-134m2-garaz-20m2-7km-od-wroclawia-dojazd-asfalt-CID3-ID7c12n.html#ece2ee6401;promoted

Nevertheless, with flats in Partynice having been something like PLN3250/m2 for 70m2 about 8 or 9 years ago, prices don't exactly seem cheap when coming in to the urban areas.

That said, I am told lots of department managers in Wrocław are earning 12PLN tys gross upwards per month. If that's widely true and there's enough of them, they aren't likely to care too much about today's higher prices. (Team leaders or Junior Managers are on around PLN6-8 tys, I'm told).
cms 9 | 1,287
6 Oct 2014  #1,811
Just to switch the conversation from Wroclaw for a while :) After years of skepticism then I am back in the market

What is a good area in Warsaw for a buy to let ? I already have experience in this sector but only one in Poland. Now looking to Warsaw because as far as I can see it you pay 20% extra on price but I think the salaries of target tenants are more than 20%+ what you get in Poznan, Wroclaw etc. Krakow looks overpriced but I sadly don't get there very often.

What I am looking for is an area that would be popular with starter families - good transport links, acceptable schools, bit of greenery, lots of similar blocks. I am thinking of Bialoleka but open to other ideas.
InWroclaw 89 | 1,915
6 Oct 2014  #1,812
Just to switch the conversation from Wroclaw for a while :)

How dare thee!!

I don't know anything about Warsaw (and not that much about Wro either, of course! it's all a mystery to me!) but hopefully someone will have some answers for you...
Monitor 14 | 1,821
7 Oct 2014  #1,813
olx.pl/oferta/dom-krzykow-134m2-garaz-20m2-7km-od-wroclawia-dojazd-asfalt-CID3-ID7c12n.html#ece2ee6401;promoted

This house would be a nice offer if it was in Wrocław. How much more costs similar house in the city?
InWroclaw 89 | 1,915
7 Oct 2014  #1,814
x2 in some outskirt areas, x3 in many areas, and after that any price up to several million.

Somewhere that had been for sale for over 1000 days (at what price I don't know) sold just 10 days after I requested a viewing. The usual agency disinterest meant that it took several communications to even get one of the agents to phone back. When he called, he didn't speak English, and my Polish helper was not available. He just hung up. No English speaker ever called back. This was a large, national firm. The next day, the place was sold! Yes after over 1000 days on the market. I assume that it must have recently been reduced in price for it to come on to my radar and that of the successful buyer.

A quick check at the same agency website (a large national company with a website in English and Polish) shows that about 1 in 100 listings are sold, with selling times of 130 to 1100 days, mostly 200 days or more. The thing to do is keep an eye on the prices and selling times, to try to detect if the secondary (used) market is picking up.

Another thing is an increasing number of agents are not charging a buyer fees but most still do. I advise voting with your feet and not using agents who charge buyers unless the property is cheaper anyway. (When it comes to rentals, the 1 or agents that don't charge tenants a fee sometimes have the property advertised at a higher price, however.)

Spoke to an agent, perhaps unsurprisingly he said "Agents are selling the cheaper houses, a few more sales now than before, it looks better than before."

On the other hand, looking at new-build flats on an estate in a good part of town: the estate agent told me that a certain price they stated was the last and final price, no further discount possible. 2 months later, that same estate and same size flat (maybe the same flat, maybe not, I don't know) is now nearly 10% cheaper.

Very patchy story it seems.

Is some law coming into force from January, meaning that buyers will need to find more of their own money for a deposit or down-payment?

I ask because I stumbled upon this in a newsletter, in Polish, which seems to say exactly that when I try to translate it.

Szukający mieszkania chcieli zdążyć przed styczniem, kiedy wchodziła w życie rekomendacja wprowadzająca obowiązek posiadania wkładu własnego.

Could anyone put more flesh on the bones of that for me?

Flat in good part of the city, seems to have been reduced from approximately 600 tys to 450 tys

Same 106m2 flat, same agent, 1/4 of the asking price shaved off...

600 K cnk.pl/index.php?fidx=7&sortby=POW_CALKOWITA&desc=1&pg=pi&st=10&lm=10&pidx=431

450 K gumtree.pl/cp-mieszkania-i-domy-sprzedam-i-kupie/wroclaw/mieszkanie-wroclaw-krzyki-106m2-nr-14567-612165718

I think the reduction is very recent. That's 25 % off.

Must admit I wish the properties I was interested in would drop similarly. So far, they're sticking to their price and some of them have been holding out for years.
Snowmuncher 3 | 24
13 Oct 2014  #1,815
inWroclaw, do you get the REAS reports. REAS is the primary market residential research arm of Jones Lang Lasalle and they produce quarterly reports covering all the major cities in Poland.There is a graph showing how prices have change over the past few years in each city.
InWroclaw 89 | 1,915
13 Oct 2014  #1,816
I don't read any formal reports. Some of them (don't know about the ones you mention) could be biased to talk the market in one direction or the other (although usually up, for obvious reasons) and so I go by my own finger in the breeze. In summary: patchy but generally down so far except for some new builds which seem to have leapt off the shelves, presumably due to MDM or some cheap deal.

That said, some stuff coming to market is ambitiously priced, so I am guessing the media is spewing encouraging words about recovery and employment prospects. Many of these flats would need a senior manager's salary or two to be sensibly related to wages, however.

The bad luck (or is it good luck, if prices continue to fall?) continues ... an agent who speaks English phoned me and promised to be in touch to set up a meeting in his office to "choose from our very big selection". Nothing.

And the owner of a flat totally failed to show up to an appointment. No call, nothing. Silence.

In both cases, I have decided not to phone and chase up the parties who let me down because I don't want to do business with people I already know are just wasters.
Monitor 14 | 1,821
15 Oct 2014  #1,817
Maybe you will find it interesting: appfunds.blogspot.nl/2014/10/deweloperzy-znowu-na-plusie.html
The most important points for biggest cities of Poland:
- time of new apartment sales was decreasing until 2014
- companies sale as much apartments as in 2006
- 30 - 40% of apartments is bought by cash, which people don't want to invest into low interest deposits
- return on construction investments of the biggest companies is quite high - around 18% (return from investment in Wrocław is the biggest. In 2008 it was 4% only)

- construction costs are slowly falling since 2008 (that and falling interests could explain previous point) (it's around 2200pln/m2 in Wrocław now)
- transaction prices are slowly falling since 2008, but transaction prices for new constructions in Wrocław are rather stable since 2008. For old houses they dropped from 6000 to 5000 pln/m2 and for new they fluctuate around 5500 during that period. I think other article were showing prices going down also for new in Wrocław?
InWroclaw 89 | 1,915
15 Oct 2014  #1,818
Thanks Monitor

It's true that some of the new developments seem to have sold most of their units, but have a few hanging on typically which they knock out for 10 or 20% off. Some estates have had maybe 4 or 5% unsold units since 2010 or earlier.

I can well believe cash buyers are buying.

I don't understand the valuations here, but no doubt there is a lot of optimism for Wroclaw's future already baked into the prices! With so many people moving into the city in the hope of gaining a better (or any) job, it looks like it will just get busier and busier here. And believe me, it's already annoyingly overcrowded. People and cars everywhere from early morning like ants. I used to live in London and it seems more congested and chaotic and competitive here than my busy London suburb ever did. It's much busier than 4 or 5 years back.

Is some law coming into force from January, meaning that buyers will need to find more of their own money for a deposit or down-payment?I ask because I stumbled upon this in a newsletter, in Polish, which seems to say exactly that when I try to translate it.

Can I ask this again as no one answered?

Having checked flats and houses today, I recognise most of the houses from months ago, perhaps 8 months ago. As for the flats, many familiar photos, and the dates of original listing and updates show last year and early this year as the listed date.

The IMF has today said low interest rates, or rather ultra low interest rates for this prolonged period, are doing great harm.
theguardian.com/business/2014/oct/08/imf-low-interest-rates-financial-crisis-threat-speculation

I couldn't agree more. It's making a malconomy or that's what I'd call it.
Monitor 14 | 1,821
16 Oct 2014  #1,819
They talk about it in comments to the article which I've just linked.

Zwiększony popyt ma na pewno w pewnym stopniu związek ze zbliżającą się końcówką roku, czyli ostatnim momentem aby kupić mieszkanie z 5% wkładem własnym. Dla wielu ludzi już to stanowi problem, a 10% wkładu własnego może być nie do przejścia.

Additional demand may be connected with last moment to buy apartment with own contribution at 5% only. It's a problem for many people and 10% could be a barrier not to pass.

somebody answers:

Biorac pod uwage mdm wklad na poziomie 10% jest na start, wiec nie martwil bym sie o blokade wkladem wlasnym.

Taking into consideration, that loan from MDM has 10% of own contribution included it shouldn't be a problem

next answer:

A do 2017 r. wkład własny ma wynosić już 20%. Takie są rekomendacje KNF. Już teraz dewelopery boją się o to ponieważ dla wielu młodych Polaków może to być kwota zaporowa.

And until 2017 own cash should equal 20%. This is KNF recommendation. Many developers is afraid of that now.

and somebody notices:

Kamil pisał o rynku wtórnym, MDM jest tylko dla rynku pierwotnego. Więc 10% wkładu własnego będzie barierą na rynku wtórnym,

MDM is just for new apartments, so 10% will be barrier for old apartments market only.

These are just comments. I don't know more than what this article says.
InWroclaw 89 | 1,915
16 Oct 2014  #1,820
They talk about it in comments to the article which I've just linked.

Ah, that's very interesting Monitor, cheers. Could you please post the link for me? Thanks.
Monitor 14 | 1,821
16 Oct 2014  #1,821
I meant this link: appfunds.blogspot.nl/2014/10/deweloperzy-znowu-na-plusie.html But I've just translated you most of related conversation :)
InWroclaw 89 | 1,915
16 Oct 2014  #1,822
Cheers Monitor, much appreciate the translation and of course it captured the most pertinent viewpoints from which I can look into things in more depth and see what's what. I'm thinking of continuing to rent until Q1 2015, because there seems to be a sparse choice of places within my budget at the moment and rather than just chuck the money away I'm probably better off renting until things deflate. If they don't deflate, I think I'd still rather rent and be free to move around. Wro is getting too busy these days, and it seems more polluted from all the traffic. Just people everywhere, cars everywhere, noise everywhere, but so far not income everywhere for me as a foreigner. I assume that's not the case for foreigners with certain skills and Poles who are flocking here in droves and perhaps helping to sustain osiedle development prices.
Monitor 14 | 1,821
16 Oct 2014  #1,823
That overcrowding is caused mostly:
- by the fact that Wrocław belongs to just few cities where are good payed jobs (as for Poland)
- 83' (+/- 5 years) born demographic boom children have just moved there from their towns and villages
- Poland has relatively small urbanization comparing to the west and it catches up now, because jobs in villages become less interesting and those in cities more. And as I said only few cities offer enough jobs and high enough salaries to pay for rent and live.

As for your strategy to wait. I think it's a good idea, provided that you buy with cash and you get interests from this cash now (in PLN it's possible to get 4% net per year just from deposit). If you want to take a debt and buy, then probably you're wasting money for renting your current place now. (you should compare how much you spend renting and how much you get from interest). Everybody would like to buy, when prices are at it's minimum, but it's impossible to predict when the minimum will happen. If you're interested in secondary market, then prices seem to go down all the time:

--

You can try buying when prices rise for 2 full years for example. Then IMHO you have little bigger chance to buy just after the lowest price happened, than when buying now, when prices fall continuously for few years. And factors of increasing population in Wrocław will not be so strong in the future, because demographic boom has finished and urbanization will not be increasing so much in the future. But factors are important for somebody investing for decades, not for somebody who just wants to have his home.
InWroclaw 89 | 1,915
16 Oct 2014  #1,824
Thank you, Monitor. All good points you made there, although I must admit I don't know where I can 4% unless you mean to lock the money in a 1-year account (no withdrawals allowed in return for a fixed rate). Most of my money's only getting 1.25% brutto/gross here! Some of it is on 2% gross, and of course they take a lot of tax off.
Monitor 14 | 1,821
16 Oct 2014  #1,825
This blogger regularly presents the best PLN deposits in each month: appfunds.blogspot.de/
For example here for October: appfunds.blogspot.de/2014/07/najlepsze-lokaty-i-konta-bankowe-lipiec.html
there are many websites comparing them:
bankier.pl/lokaty/porownaj-lokaty/10-tysiecy-na-3-miesiace

Currently the biggest interests are for 3 months deposits. Since around 1 year SKOK
pl.wikipedia.org/wiki/Sp%C3%B3%C5%82dzielcza_kasa_oszcz%C4%99dno%C5%9Bciowo-kredytowa
are also insured by BFG
pl.wikipedia.org/wiki/Bankowy_Fundusz_Gwarancyjny
so they are same secure as the smallest banks. The guy from this blog suggests skok.wolomin.pl as having good finances (low chance of bankruptcy) and deposits with high interests. I have some deposits there, but opening account was little hard there, as their branches are quite small, many people, slow procedures.

But why don't you like 1 year deposits? If you really need the money you will just loose interests.
InWroclaw 89 | 1,915
16 Oct 2014  #1,826
But why don't you like 1 year deposits? If you really need the money you will just loose interests.

Well, I wanted to keep the money on easy access in case I needed it. In the UK, accounts which tie money up for a year usually either don't allow any withdrawals or the withdrawal costs something like 6 months' interest (which can also mean that they take the equivalent of 6 months' interest from capital if 6 months has not yet passed!).

I shall look at the info you sent me with great interest (pardon the pun!). Thanks again!

I'm reminded from that graph of how the prices shot up since 2006. A friend who bought back then said to me just a few weeks ago "It's crazy, how much do they want now for this estate?" He was really surprised when I told him it's almost double what he paid and they don't really want to negotiate in most cases, or only discount it by a little. He owns the flat and even he thought the flats were not worth that price, and they are better than average quality it seems. Nevertheless, prices have been slow to come down on that estate, despite the fact units are still empty from when they were built and completed some years ago. And his estate is pretty inconvenient too -- a terrible bumpy access road with commercial vehicles on it all the time, single file traffic in and out of the gates because of parking on the pavement on both sides which means a driver almost always has to stop and reverse or have someone else give way, it's just a big hassle living there. Yet the asking prices have pretty much stayed up. There was one reasonable bargain there a few months ago but that sold in about a week, from what I can tell.
Monitor 14 | 1,821
16 Oct 2014  #1,827
But the big part of apartment prices going down is inflation. According to Ministry of Finance website (inactive link disabled ):
finanse.mf.gov.pl

inflation between January 2007 (peak of housing bubble) and October 2014 was 23.64% And around this much you should be able to get if you're putting your saving during that time on highest interest deposits.

To make it easier to imagine 400 000 PLN worth flat in 2007 would cost now 323 514 PLN if no inflation, but simple prices adjust.
InWroclaw 89 | 1,915
16 Oct 2014  #1,828
To make it easier to imagine 400 000 PLN worth flat in 2007 would cost now 323 514 PLN if no inflation, but simple prices adjust.

Yes, it's a somewhat painful point. When I put that to people here a year or so ago they said their wages hadn't increased in years and they denied shop prices had risen much. Yet lately it seems managers here are on good money, which to me suggests there has been wage inflation and that explains why some people don't think accommodation is expensive. I was told inflation here is not an issue, but 23% inflation since 2007 does not seem like cheery news.
superuser1999 12 | 41
17 Oct 2014  #1,829
Does anyone here have experience in owning rental investment apartments in Krakow ?

I am thinking of getting into some rental investment apartments in Krakow and wanted
to ask if anyone knows some of the pros and cons of this game ?

i have looked at prices and rental income and tried to figure out if it's worth it or not.......

it looks like a nice 1 bedroom apartment rents for 2400 PLN if it's in a central location.....

thanks for any advice!
InWroclaw 89 | 1,915
17 Oct 2014  #1,830
Just reading about people moving to Berlin and not entirely surprised to see that Berlin is cheaper than Wrocław for a 68m2 flat. It's 82K euro. And, from the photo, this is a nicer and more leafy flat than here in Wroclaw.

I assume these are real ads in Berlin, as most of the blocks are very nice compared to even some of the latest ones we have here. Sorry, but it's true. I wish it wasn't, as Poland is a beautiful country away from its urban sprawl.

I think I'm right in saying that wages in Berlin are likely to be considerably higher, food is cheaper or the same, property taxes are average.

So, not really sure why Wro costs what it does.


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