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The current property boom in Poland is a bubble


InWroclaw 89 | 1,915
22 Jan 2013 #151
Did you consider a commercial then a residential?lots of properties yield 8 to even 10% of your investment and less hassle dealing with them renters?plus the silent property rise in 15 yrs or more is 10% also.While residentials dont have ROI over 5%?

I'm just looking to rent a flat for myself to live in, am not an investor. I don't know if I'd invest at the moment, there could be a storm blowing in. The only thing I'd consider is if the NBP Poland cuts rates it could cause a mini boom or bubble, not sure which. Frankly, I don't really know why prices are so high in Poland.
pip 10 | 1,661
22 Jan 2013 #152
Bubble denial is slowly becoming less popular among the "it's different here brigade".

I will continue to deny there is a bubble,because there isn't one- but you have your terminology wrong and don't know how to use it correctly. Good thing you are not a doctor.
MoOli 9 | 484
22 Jan 2013 #153
I don't really know why prices are so high in Poland.

We in my la la land circle think because Poland was/is a cash economy and foreigners trying to make a big profit didnt help either.Not to mention banks loaning out 30% more then your upraised property prices.

Good thing you are not a doctor.

lol like the docs who use colonoscopy to remove tonsils:))))
InWroclaw 89 | 1,915
22 Jan 2013 #154
We in my la la land circle think because Poland was/is a cash economy and foreigners trying to make a big profit didnt help either.Not to mention banks loaning out 30% more then your upraised property prices.

You mean they had the same disease as the UK -- lending out 130% of a property's value? Will they ever learn?
pip 10 | 1,661
22 Jan 2013 #155
Just for your information...

Definition of 'Housing Bubble'
A run-up in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future. Housing bubbles usually start with an increase in demand (a shift to the right in the demand curve), in the face of limited supply which takes a relatively long period of time to replenish and increase. Speculators enter the market, believing that profits can be made through short-term buying and selling. This further drives demand. At some point, demand decreases (a shift to the left in the demand curve), or stagnates at the same time supply increases, resulting in a sharp drop in prices - and the bubble bursts.

Read more: investopedia.com/terms/h/housing_bubble.asp#ixzz2IjrorDdd
pawian 170 | 11,433
22 Jan 2013 #156
Just for your information... Definition of 'Housing Bubble'

Ok, ok, relax! I already said I accept your point of view! polishforums.com/real-estate-20/current-property-boom-poland-bubble-12413/5/#msg1343015
No need to take it any further.
MoOli 9 | 484
23 Jan 2013 #157
it is not my ridiculous definition. it is a definition that has been posted here, time and time again by wikipedia. not by me. If it deflates at a slow rate then it is, by definition, not a bubble. a bubble pops. hence the name bubble. so if once the market hits its peak price then slowly declines it is not a bubble. which is what it is doing now.Poland is not experiencing a bubble.

Exactly my point! you explained them:))
pip 10 | 1,661
23 Jan 2013 #158
pip: Just for your information... Definition of 'Housing Bubble'

Ok, ok, relax! I already said I accept your point of view!
No need to take it any further.

ok- but there are still those spouting off about a bubble when there isn't one and it is inaccurate.
peterweg 37 | 2,321
23 Jan 2013 #159
ol! thats not the case anymore dude.Poles also have more or compatable money to beat you if you implying that they have more money to raise prices.

You do talk rubbish, the limit on farm/ agro-building land is until 2016 and you need a permit until then.

ok- but there are still those spouting off about a bubble when there isn't one and it is inaccurate.

Over 100% price rises followed by a 50% fall is a bubble. Poland is approach that level of fall. Feel free to tell anyone who disagrees with you to shut up, for the good it will do you.

as buyers in Poland, it is a good time to buy.

Hahahaha...
poland_
23 Jan 2013 #160
Hahahaha...

I am agreeing with PIP if you have cash there are some bargains out there.
InWroclaw 89 | 1,915
23 Jan 2013 #161
Over 100% price rises followed by a 50% fall is a bubble.

I would've thought that if it's as you say then it was or is a bubble, not sure why Pip wants to split hairs on that.
peterweg 37 | 2,321
23 Jan 2013 #162
not sure why Pip wants to split hairs on that.

Because if peopel think there is a bubble they will be even more disinclined to borrow and buy. Anybody with any sense will realise the market will go down, to affordable, no matter what.

I am agreeing with PIP if you have cash there are some bargains out there.

True, but you will be buying into to a falling market. Making money on highly geared investment is one thing, its another to lose it. How many other (legal) investments allow you to lose 200%, 300% of the money you put in?
sgrya1 - | 3
23 Jan 2013 #163
An economic bubble is when prices are highly inflated above the long term expected values.
Worldwide housing is considered affordable at a price of 3 times the gross annual household income.
Many countries now have unaffordable housing due to the surge in public debt. Australia's ratio of median house price to gross before tax annual median household income is 5,6 and is considered severely unaffordable.

America and Ireland have had housing 'bubbles' where prices have recently deflated to the point where housing is now deemed 100% affordable. (less than 3).

A bubble can only be seen in hindsight though with the correction of values to historic norms.
Adjusting for inflation, Polish property prices have fallen by 40% since 2008. Quite a remarkable 'deflation' and arguably a pop. There are also no signs yet of stabilization.

Whether you consider a 'burst' to be a period of days, months or years to be to bring house prices down to the long term historic average may be a point of argument but the effect is the same.
pip 10 | 1,661
24 Jan 2013 #164
A bubble can only be seen in hindsight though with the correction of values to historic norms.

EXACTLY!!!
MoOli 9 | 484
24 Jan 2013 #165
How many other (legal) investments allow you to lose 200%, 300% of the money you put in?

Stock Market!

You do talk rubbish, the limit on farm/ agro-building land is until 2016 and you need a permit until then.

Was not my point anyway if you read it correctly.Any way why is it cheaper to buy where foreigners dont need a permit?If a foreigner likes the property and wants it so badly can get a permit in 2 months or open an company and buy it...so why is it cheaper as u say to buy where they need a permit?When I was not a citizen(since I am from a non EU country) I had to get permit even to buy an commercial property or land anywhere in Poland or wait for 5 years after my permanent card to buy it,which is rather expensive and time consuming.
jon357 63 | 15,214
24 Jan 2013 #166
Was not my point anyway if you read it correctly.Any way why is it cheaper to buy where foreigners dont need a permit?If a foreigner likes the property and wants it so badly can get a permit in 2 months or open an company and buy it...so why is it cheaper as u say to buy where they need a permit?

Exactly - where there's a will there's a way.
bullfrog 6 | 603
24 Jan 2013 #167
Over 100% price rises followed by a 50% fall is a bubble.

The definition quoted is worthless, because it is too imprecise. As explained by other posters, it's the rate of decrease that matters

fall by 50% over 1,2, 3 years: it's was a bubble
fall by 50% over 20 years: it isn't a bubble
InWroclaw 89 | 1,915
24 Jan 2013 #168
EXACTLY!!!

But he's suggesting that it was indeed a bubble, Pip:

Adjusting for inflation, Polish property prices have fallen by 40% since 2008. Quite a remarkable 'deflation' and arguably a pop

APF 4 | 106
24 Jan 2013 #169
What does boom mean?? Polish people make debts to buy own flats .. is this called boom in Poland?? I can not imagine, who would be intrested to invest in Poland .. start to rebuild your country, like back then the rubble women did ..
1jola 14 | 1,879
24 Jan 2013 #170
What does boom mean??

You don't seem bright enough to comprehend the date of the beginning of this thread, so let me explain it to you. Six years is a lifetime when it comes to real estate trends.
pip 10 | 1,661
24 Jan 2013 #171
pip: EXACTLY!!!

But he's suggesting that it was indeed a bubble, Pip:

I see that, but I highlighted the most important point. And his point about the market falling at a slow rate and still being a bubble is wrong. A bubble bursting, is just that. The market has high prices followed by the "burst" which leads to lower prices. Dropping 40% since 2008 is not a bubble bursting. It is the prices steadily decreasing and they will soon level off.

The prices were hugely inflated in the first place---based on the amount of residential properties there were, now that the market is saturated it is a different situation.
Wroclaw Boy
24 Jan 2013 #172
if the inner city property market in Poland isnt a bubble then i dont know what is.
f stop 25 | 2,513
24 Jan 2013 #173
I will continue to deny there is a bubble,because there isn't one

Dropping 40% since 2008 is not a bubble bursting. It is the prices steadily decreasing

As long as you don't call it a bubble!
May I suggest: air ball, balloon, barm, bead, blister, blob, drop, droplet, effervescence, foam, froth, lather, sac, spume or vesicle
Avalon 4 | 1,068
24 Jan 2013 #174
Dropping 40% since 2008 is not a bubble bursting.

Pip, Apple shares yesterday, overnight, dropped 10%. $46 billion wiped off the value of the company. Must have been a bubble!!!!
Oh sith!!!, they are still the most valuable American company. Must re-write the dictionary.
InWroclaw 89 | 1,915
24 Jan 2013 #175
The prices were hugely inflated in the first place

But, Pip, 'hugely inflated' as you very honestly put it, sounds bubble-like, does it not? :o)
peterweg 37 | 2,321
25 Jan 2013 #176
Pip, Apple shares yesterday, overnight, dropped 10%. $46 billion wiped off the value of the company. Must have been a bubble!!!!

You really don't have a clue do you? Of course Apple share are vastly inflated, a bubble asset. They have fallen 35% in a few months. A more over inflated, over hyped company, short of facebook, you won't find.

I see that, but I highlighted the most important point. And his point about the market falling at a slow rate and still being a bubble is wrong. A bubble bursting, is just that. The market has high prices followed by the "burst" which leads to lower prices. Dropping 40% since 2008 is not a bubble bursting

A bubble bursts in a tenth of a second, so of course by your definition the only thing that is a bubble is a soap balloon full of over-pressured gas.

However, the rest of the world understands that a housing bubble is made of houses not air and the rate it deflates has no bearing whatsoever on whether its a bubble or not. Care to point me to the source of your genius logic, but I'll hazard a guess its your real estate husband and his like minded associates.

Keep it up pip, this is funny.
poland_
25 Jan 2013 #177
Apple shares yesterday, overnight, dropped 10%. $46 billion wiped off the value of the company. Must have been a bubble!!!!
Oh sith!!!, they are still the most valuable American company. Must re-write the dictionary.

Avalon, you know the difference between ' Real Asset ' and ' Paper Asset ( electronic)' furthermore there is far more liquidity in Blue chip Equities than there is in Polish residential Real estate.The two could and never should be compared as equal.
InWroclaw 89 | 1,915
25 Jan 2013 #178
Apple share are vastly inflated, a bubble asset. They have fallen 35% in a few months. A more over inflated, over hyped company, short of facebook, you won't find.

I was astounded when I discovered how much Apple shares had been worth. They became bigger by market cap than MS didn't they?! Like the dotcom tech mess all over again. Samsing are hot on the heels, and pretty much mainly on the back of semi-cond sales and probably the Galaxy have done gob-smackingly well.
cms 9 | 1,271
25 Jan 2013 #179
It is nonsense that a bubble can only be seen in hindsight. Plenty of people saw the internet bubble at the time and plenty of people saw the Polish housing bubble in 2008.

30% is not a managed decline - are there any other asset classes that have gone down so much over the past 4 years in Poland ? Internationally there are a few (e.g. Greek bonds).

There are plenty of bubbles that are visible now - Apple shares, gold prices, footballers wages, if you wanted some Polish examples then i would suggest the shares of LPP which at the moment cost about 5000 zloty each.
Avalon 4 | 1,068
25 Jan 2013 #180
They have fallen 35% in a few months. A more over inflated, over hyped company, short of facebook, you won't find.

And yet, how many of the so called experts, Hedge Funds, etc, bought them. Or are you telling me that the small investor bought these shares at the $4-500 range.


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