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House prices in Poland to drop more or rise again?


byronic 3 | 30
11 Dec 2008  #1
I just returned from Lodz, i would like to buy a small house or apartment there, or somewhere in Poland. Does anyone know whether prices will be likely to drop more in the near future, or rise, or remain constant for the forseeable future?
Lotnik767 3 | 145
11 Dec 2008  #2
I'm not sure how things look in Poland regarding the real state market but if the prices are drooping than they will continue until the end of 2009. Starting 2010 it will start going up if the economy picks up. Good luck buying your new home.
OP byronic 3 | 30
11 Dec 2008  #3
Thank you, I'm expecting that there will be a rise when Poland joins the euro, or shortly before this happens- but i could be wrong...
Lotnik767 3 | 145
11 Dec 2008  #4
I think that the whole Euro thing for Poland will be a mess it's to soon but we shell see!
OP byronic 3 | 30
11 Dec 2008  #5
I agree, but it's probably better to be in than out.
ozdan 8 | 67
11 Dec 2008  #6
From what I understand (correct me if i'm wrong), poland has already blown their initial target for adopting the euro due to relative volatility of the zloty?

bloomberg.com/apps/news?pid=20601087&sid=a6UusitJbqs4&refer =home

I would be hedging my bets on prices dropping more over the next 12 months. I'm not in poland now, but from what i can tell from talking to people and reading the news, people in poland are generally fairly optimistic. Whilst this is a good thing in some ways, i think at times like these a bit of pessimism can be healthy. Being prepared for the worst is better than thinking you are immune to this financial crisis.

When the rest of the world is cutting their rates, poland is keeping theirs high. I'm wondering what will happen when suddenly they start cutting them at 1% a month. What will happen to the relative value of the zloty against the swiss franc and all those people who have mortgages in chf? Potentially.. any drop in the value of real estate could be compounded by the currency difference.
ash1972 3 | 88
12 Dec 2008  #7
One thing to remember is that Poland has a very healthy banking system. Lending is not going to be hampered in any way by solvency issues.

Britain - and much of the rest of the world - is currently discovering that driving the base rate right down to zero doesn't make banks any keener to lend to one another or anyone else for that matter. The system is broken.

Poland won't be immune from the slump but will emerge much, much quicker. The government has made it clear that it will not panic cut rates as it has no reason to.
SeanBM 35 | 5,808
12 Dec 2008  #8
they will continue until the end of 2009. Starting 2010 it will start going up if the economy picks up.

What are you talking about?
What do you base the 2009/2010 on?
I don't belive you have a clue about what you are talking about.

I think that the whole Euro thing for Poland will be a mess it's to soon but we shell see!

Read above.

From what I understand (correct me if i'm wrong), poland has already blown their initial target for adopting the euro due to relative volatility of the zloty?

Yes this is true.
The next target date for the Euro is 2012.
Hungary recently had huge problems and the Polish Zloty was effected greatly by it.
So Poland are taking the 2012 deadline for the Euro very seriously so the currency will not be so open to huge fluctuations.

I think people here are not being very optimistic, they are aware that they are tied in but the economy is healthy and banks are still lending.

I know what you mean though, prepare for the worst and hope for the best.

value of the zloty

It is a generally belief here that the Zloty will increase in value.
But i am not an expert.

Poland won't be immune from the slump but will emerge much, much quicker.

And by the looks of it it will dip a lot slower and not so low.
markme - | 9
12 Dec 2008  #9
I think people here are not being very optimistic, they are aware that they are tied in but the economy is healthy and banks are still lending.

I am surprised that you say banks are still lending in Poland. Admittedly I've only dealt with WBK, but as far as I can see at the moment they will not give mortgages to locals, and are very slow if not also refusing to give money to foreign investors.

What bank(s) are you dealing with, and are they lending to locals to, say, buy new houses (a matter close to your heart I'm sure!)?
SeanBM 35 | 5,808
12 Dec 2008  #10
but as far as I can see at the moment they will not give mortgages to locals, and are very slow if not also refusing to give money to foreign investors.

They now want 30% deposit, yes.
And it has always been a long and difficult procedure for foreigners, so nothing new there.

What bank(s) are you dealing with, and are they lending to locals to, say, buy new houses (a matter close to your heart I'm sure!)?

They are giving loans but the 30% deposit is required.
This will slow people down and there has recently been a a surge of people getting mortgages, just before this 30% thing came into effect.
But as far as I can see this is healthy for the country, people do not live on credit here and tend to save their own money.

I am not saying that prices will not be effected, they will more than likely.
I just get info back from Ireland and I do not think the same thing will happen here.

I am currently dealing with Kredyt Bank, (it's like pushing wet rope, up hill).
boydie
14 Dec 2008  #11
Drop for 3 years then stay flat. There are liquidity issues for many banks here and not only will that affect the mortgage market but also the economy in general.

If 30% of say a 400.000 zloty property is PLN 120.000 then where on earth do you think people will get that kind of cash when their average take home PLN 3.000 ? It would use up a husband and wife's entire salary for 20 months.

The Hungarian excuse given by the govt is not correct. In fact the Hungarian currency has strengthen consideraby against the zloty over the last 4 months, meaning that currency traders see Hungary as less volatile than the zloty.
ash1972 3 | 88
14 Dec 2008  #12
Boydie, what currency traders do is neither here nor there. Suggesting that the recent 4 month appreciation of the HUF against the PLN 'means' the HUF is more stable is akin to gurus telling everyone how the unrelenting bull market in Enron shares proved what a great company it was.

Even a cursory glance at the fundamentals will show you that Hungary is totally screwed. Poland does not have a multi-year history of mistakes to put right.
Wroclaw Boy
14 Dec 2008  #13
The property market will stay flat for years, thats my 2 pence worth. Even if they make the euro 2012 deadline that will have little to no effect on propetry prices. There worth what there worth in any currency.
benszymanski 8 | 465
14 Dec 2008  #14
There worth what there worth in any currency.

True, but don't forget there is the mentality that prices rise on everything when the euro arrives, which is why historically foreigners have chosen to invest in countries pre-euro. If this is happening/will happen in Poland then the increased demand may affect prices [plus I think you mean "they're" not "there"].

But this thread is pretty meaningless anyway. In general nobody knows whether prices will go up, down or sideways. Everybody is guessing, some make better guesses than others and some get lucky.
Wroclaw Boy
14 Dec 2008  #15
[plus I think you mean "they're" not "there"].

OMG not another spelling corrector.

historically foreigners have chosen to invest in countries pre-euro.

If i remember rightly there was a sharp increase in Polish property prices prior to EU accession and nothing happened, so back down they came. Im sick of hearing speculators predicting property increases based on all kinds of facts like the European 2012 cup. That will bring better infrastructure and put Poland more fimrly on the map but a property increase, i dont think so.

Any investor that has half a clue will know the history of this market and make a decision accordingly. Besides foreign investment has already happened in Poland, the speculators will be onto new markets when the financial crisis eases. Timing is the name of the game and Polands property boom time is over and taking on the Euro currency isnt going to make a difference.
benszymanski 8 | 465
14 Dec 2008  #16
not another spelling corrector

typos I can restrain myself. Big ones like that from native speakers I'm afraid I can't help myself :-)
boydie
14 Dec 2008  #17
So I have just had my cursory glance (all figures from the Economist on my kitchen table)

GDP growth forecast for 2009 Hungary 3,0% v Poland 3,9%
Unemployment Hungary 7,7% Poland 8,9%
Inflation Hungary 5,1% Poland 4,5%
Budget deficit as % of GDP Hungary 5,5%, Poland 5,2%.
Change in stock market last 12 months Hungary 60% Poland 54%.

So Poland is in fact very similar to Hungary on most measures, apart from interest rates which are 11% in Hungary.

I do business in both countries and wouldnt say Hungary is more screwed than Poland. Both countries are very poorly governed.
ozdan 8 | 67
14 Dec 2008  #18
I'm not trying to be all doom and gloom, but i guess the point i was trying to make is that it seems a large majority of polish are convinced that the crisis which is hitting their neighbours will mostly pass them by. Who knows.. I'm no economist.. it might.. but probably not.

Regardless, the men in charge should be rounding up the troops and getting the heavy artillery out to protect their borders in any way they can from the potential threat.

Back to the currency.. Adoption of the Euro will most certainly have a positive effect on real estate prices. Specifically from the POV of foreign investment from within the EU as this will eliminate any hesitation due to currency risk.
ash1972 3 | 88
15 Dec 2008  #19
I think benszymanski is the only true voice of reason. Absolutely, we're all just guessing - with fingers crossed.

Boydie - did you mean MINUS 60% and 54%? ;)

Also Boydie - your data selection ignores the rather important fact that Hungary was saved from total collapse in October with a $25bn loan from the IMF. Your perception that Poland and Hungary are run in the same way really does need some explanation.
Seanus 15 | 19,706
15 Dec 2008  #20
I'd say, judging by trends, that prices will rise. As Poland becomes a more attractive proposition for prospective buyers, so market economics recognises that an extra buck can be made.
Wroclaw Boy
15 Dec 2008  #21
In general nobody knows whether prices will go up, down or sideways.

Well thats not really true, certain individuals have relatively accurate ideas of where a property trend will be heading.

Everybody is guessing, some make better guesses than others and some get lucky.

You mean make "informed decisions" some make informed decisions better than others.
ash1972 3 | 88
15 Dec 2008  #22
Well thats not really true, certain individuals have relatively accurate ideas of where a property trend will be heading.

And I suppose this rarified elite includes you? :) What exactly makes you think the boom is over forever in Poland? There will be future booms in central London property, a market that is several decades older than anything in Poland.
Wroclaw Boy
15 Dec 2008  #23
What exactly makes you think the boom is over forever in Poland?

Nothing I never stated that. My prediction is that the property market will generally remain flat in Poland for years and that taking on the Euro will not make much difference.

There will be future booms in central London property, a market that is several decades older than anything in Poland.

To add to my original statement I believe that certain areas of the market will increase such as historic, land and commercial property especially industrial parks. When i mentioned flat prices I am targeting properties within the main cities, apartments, houses and commercial.
boydie
15 Dec 2008  #24
Poland has been run for 3 of the last 5 years by the bizarre twins plus that tall Frankenstein bloke and the molesting farmer and now is run by a different bunch of windbags who say lots and do nothing. I am still waiting for all the massive cuts in red tape they promised, still waiting for them to build some roads, still waiting for lower taxes, still waiting for structural changes to the public finances.

Hungary is much the same and their problems have been caused by many factors they share with Poland - asset price boom, credit boom and unwillingess to trim the public sector. This has been compounded in their own case by their high exposure to currency movements, which Poland doesnt have so much.

But Ash, as on the other thread about Krakow you seem to be trying to convince yourself, so why not stop debating here who has the most reliable statistics and just go and borrow a big whack from whoever will lend you it and buy a load of places here. Then in 2012 you can tell us how much profit you made and we will all look like mugs.

As for me, I've made my cash on Polish property, back in 2001 and 2002, not as speculation but because I needed somewhere to live and had cash then. I dont anticipate buying anything else in this market for another 3-4 years.
Lotnik767 3 | 145
15 Dec 2008  #25
All this is just a rollercoaster it goes up and down it’s been doing that thought history! I think things will get worse first than better, 2009 will be a bad year for USA, Poland and the World you will see and don't be ignorant, and things will start picking up in 2010. The reason Polish banks are doing some what okay now is that the interest rate is like 21% + that is sick and for them to give you a loan you have to have 30%+ down payment (and who the fuck in Poland has that) when average savings in Poland in 1000 zloty! Poland is a very poor country every thing is expensive and because you have well doesn’t mean 20 other people have it good. I just say that what ever happens in the USA the world gets the after shocks times two and until things don’t start improving hear in USA, it will just bet worse!
bolek 6 | 330
15 Dec 2008  #26
when average savings in Poland in 1000 zloty! Poland is a very poor country every thing is expensive and because you have well doesn’t mean 20 other people have it good. I just say that what ever happens in the USA the world gets the after shocks times two and until things don’t start improving hear in USA, it will just bet worse!

I agree, most of my friends struggle to live pay by pay, the likes of some of the Irish people on this forum claiming to have big wallets and high income makes me laugh.
SeanBM 35 | 5,808
15 Dec 2008  #27
Irish people

Is that about me?
And who else is Irish?
And who has big wallets?
You seem like a happy fellow.
bolek 6 | 330
15 Dec 2008  #28
You seem like a happy fellow.

Happy indeed, I don't know how the future in Poland will turn out suffice to say that every country engaged in the global economy will in some way be effected by the current global crisis. Poland will be no exception, the reason why things are hanky dory so far in Poland is because a lot of people are returning back from GB and Ireland with plenty of cash and are accessing the property market and spending money,(things will change when the money runs out) my prediction is that blue chip properties will maintain current value and more, but homes on the outskirts will go down. Wages are still very low and it is a struggle to survive on average wages, let alone borrow to purchase a house. I could be wrong!
benszymanski 8 | 465
16 Dec 2008  #29
Maybe I should have been clearer - informed people will have an idea about the direction prices will head in, but I don't believe anyone knows the timing.

For example a lot of people had been saying prices would drop in the UK for years, so the fact that they have is no suprise, but knowing when the drop would occur is a little harder to guess.

The problem is that things such as currency prices, property prices or the stock market are greatly affected by investor confidence, and because that is a human emotion it is unpredictable. Yes there are general trends, but there are also a lot of unpredictabilities involved too.

What I am saying is that long-term it's not too hard to make predictions but short term, such as 6 - 12 months I am cynical that anyone can make a good prediction.
ash1972 3 | 88
16 Dec 2008  #30
But Ash, as on the other thread about Krakow you seem to be trying to convince yourself, so why not stop debating here who has the most reliable statistics and just go and borrow a big whack from whoever will lend you it and buy a load of places here. Then in 2012 you can tell us how much profit you made and we will all look like mugs.

I don't need convincing of anything, least of all that good quality Polish property will do well in the medium term, i.e. over the next 4 years. It's just that you have a particular talent for talking Poland down by picking the data that suits you. Equating Hungary with Poland is a classic example: you talked about GDP and FDI but conveniently forgot about IMF :)

And I think the property I already own is quite sufficient to prove my views re. 2012.


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