prices will go down for good while longer
The graph you are referring to actually does not seem to suggest that. Rather that they are reaching plateau. From what I remember from technical analysis after that they can go either way.
Remember - that situation on Polish market changed after accession to EU, which created increase in property price (given the time lag it takes to earn some money...)
I think that to have real comparison you have to look at specific standards and prices on European market. A nice, modern 2/3 bedroom apartment (let's say 75 sqm) will probably will probably cost similar in most European cities (OK, there might be certain level of differences between Paris, London and Warsaw, but the differences will be smaller when you look i.e at Berlin, Budapest, Prague and Warsaw). People that can afford more, will go for better standard, that's why properties in western countries are generally bigger. People that can afford less, will go for lower standard or smaller place. OK, this is going to create movement on the market, but long terms prices will equalize. The issue is - you can't look at historical prices and expect that prices will go down to the previous level. This will never happen. Property market changed in last 10 years and there is no going back, unless something very drastic happens.
The way I interpret this graph? I think prices might go down a bit more (not much) then stay there for a little while and start going up.