House prices in Poland to drop more or rise again?

Bolek,

What I meant was that high end central places are more sellable because richer Poles can afford to buy without a mortgage.

I'm not one of the Polish business elite - I'm an English guy working as an IT contractor in London for as long as there's still work!

I won't tell you for one moment that Poland won't be affected. BUT I will tell you that it won't be as badly affected as either the western or BRIC nations and will recover far quicker.

1) Poland is not a big commodities exporter.
2) It's a less open economy than many
3) Growth is not fuelled primarily by FDI

How many rich poles are there that can afford to buy a house without taking a loan, a few I might suggest. the notion of buying a investment property was to take out a loan, negatively gear it to avoid taxation and as was the case some years ago sell it at a handsome profit. This is what caused the current meltdown in the US.

I believe that property investment in Poland at this particular moment is risky, however some specific pockets of real estate may be worth while.

Keep in mind that prices of homes in the US are cheaper than that in Poland.

The average gross wages in Poland is about 3200zl a month. Food, gas, water electricity is expensive. I know too well of the huge cost of heating during winter.

How much do you think a bank is going to loan these people for a house??? This means that anything over say 400,000zl will be out of the reach of most people, I don't think people from GB or the US will be flooding the gates to buy Polish Real Estate.

We live in a global economy and every country will be effected by this current crisis.

There has been a lot of talk from governments in GB and the US suggesting that jobs should be offered to US nationals in there countries I could imagine the procession of

poles returning home only to be greeted by unemployment and poverty.

Lets face it a lot of people who purchased investment properties have lost and will loose more, and that includes me.

It depends how long you hold on for Bolek. Maybe you've made a paper loss now, but if you bought anything half decent you should hold onto it for the long term. You can't always expect to 'flip' profitably - there must be a contingency plan.

Actually I don't believe in borrowing money to invest in property. Sure, this leverage can make you money when markets are booming, but the same argument could be applied to the stock market. No one in his right mind will borrow to buy shares, so - why property?

The sole exception to this is the property you buy as your own home. Leverage is justified here as you are essentially not concerned about capital gains.

Ash1972, sorry my son, you just don't get it....almost all millionaries started with nothing and ended up rich by borrowng money, I quess timing has a lot to do with it.

Yes, Bolek, because they were LUCKY. What is the actual difference between borrowing to buy shares and borrowing to buy property?

Oh yes, I forgot - property always goes up..

People buy shares with borrowed money all the time! its called a margin loan.
And property doesn't always go up.. do a google search for "japan lost decade".

not always, I'd prefer to gamble on the US property market than of the Polish, the money on Polish real estate has already been made, although some pockets still exist to make money, one thing for sure people buying off the plan are set to be very disappointed. Poland is still to feel the effect of the current crisis which is getting worse by the day.

I was being ironic. Property clearly doesn't always go up.

... in flames, unless you bought a holiday cottage in Wales in the 80s when of course such a guarantee could be given. Come home to a real fire..

Not only from the capital appreciation aspect, im having real problems renting units at the moment.

does anybody know the average price of a dwelling in Poland?
this information exists in the UK, where the official 'average' house price is quoted almost on a daily basis, however is there such a thing in Poland?

Thats tuff to ascertain because the differences between city and country change drastically.

Average in Wroclaw is around 6000 PLN / m2. you can buy a 200 m2 house with 2 acres of land in the country for around 100,000 pln so 500 pln / m2. There are average prices available but i cant be bothered to look for them.

thanks for taking the trouble to reply

In respect of Real estate values coming down in Poland this year. It has been reported that prices will drop on average by 15 to 20%. This is not taking into consideration the current value of the Zloty which has depreiciated by 30%over the last six months against most hard currencys. In the last six months of 2008 res- real estate dropped on average by 8 to 12%. So based on my calculation if you are an investor who is using Euro,USD and even Sterling you should be looking at paying 50% of 2007 Q4/ 2008Q1 prices.

I have been looking to purchase a detached property in one of the many gated communities in or around Warsaw.

Only last month one of the developers contacted me to offer new prices which were 20-25% lower than the prices listed in summer 2008.

It appears that very few are buying at the inflated 2008 prices. I have been keeping an eye on several developments and nearly all properties available last summer are still listed as available. Some of the new projects are slow to get off the ground, with developers websites contantly being 'under construction' with no new information available.

I am expecting further discounts as developers start running into financial difficulties.

I suppose that you can't be suprised that people with a stake in this market will try to put a positive spin on the general fall last year in the value of Polish property investments God forbid entertaining further drops in 2009. Yes, there really was a bubble - a quite ridiculous one. It is now bursting. Just accept it.

I guess the same could be said for those who AREN'T in the market talking things down.

The recent boom seems to have created a harsh reality for a large number of pols.

I was talking to a polish friend last night. She is a qualified psychologist and said she earns 1050zl a month and that any hope of her owning even a small flat is non existant. This seems to be a common story.

Property prices and incomes seem to be disproportionate. This makes me wonder how much of the boom was driven by foreign money, whether it be from pols who have gone to work abroad or the brits and irish looking for an "emerging economy" to get a faster growth on their investments.

True, we may be getting to the heart of the matter here, most most poles could not afford a small apartment... It was the foreign money coming in which together with a shortage of housing that pushed prices up, The demand for housing as distinct from living in a high rise block was also increased due to a lot of Poles earning foreign currency who bought a piece of land and built on it, with a severe downturn in Ireland and UK this is no longer the case and standby for the next housing crash!

Got to look on the bright side, now that the bubble is bursting property prices might actually become near affordable for Polish people whilst I suppose many Irish speculators have unwittingly made an involuntary one way contribution to the Polish economy. To look at the bravado and swaggering in the posts from a year ago.. my word.

Right, there is an upside. Despite the daily doses of bad news, if someone has money, a stable job and good credit, now is a great time to buy. It is a buyers market, the likes of which may not come around again once economies recover.

A very definite upside, and I'd like to think a more sane and reasonable future for all.

Oh, I don’t know. I suspect for a time people will be more cautious with their investments and how far they extend themselves, but before long things will get back to how they were before. People –society- rarely learn their lessons.

What "bravado and swaggering" by some Irish Posts???.

I dont remember any either atleast not by the Irish. Is he talking about a Scottish lady maybe?

There was another poster who claimed equally that the "Irish" were the worst but he has not posted since.
I wonder if there is a connection with our new guest?.

Either way it ought to be interesting to see what he drags up from the depths of the PF archive.

Ah, I don't really care,
some Irish people invested in Poland,
not many in comparison to Bulgaria or other new E.U. countries.
Some people like to be smug and take joy in other people's loss,
which is not a good way to live in my opinion.

I don't regard Polish property prices becoming afforable to Poles rather than rapacious property speculators as being "smug". There was plenty of smugness a year ago and I say if you can give it out then you can take it as well. I think the Irish have a marked presence in the speculative community that has attached itself to Poland and I do think there was - still it seems - a certain smugness there. I guess that they willbe heading off soonish - where next for Irish speculative voyaging - China? In that case we can look forward to a boom and bust scenario there as well.

The Chinese are now buying up foreclosed properties in California. I say good, we can give them the whole thing in exchange for their canceling our debt.

It would be good to see Arnold doing a Chinese language promo..

Polish real estate prices are not immune to what is happening in the rest of the world. Too many in Poland took out loans denominated in Swiss francs, and the falling zloty is killing them.

I live in Sarasota Florida where median prices have fallen 41% since Feb 2008. That kind of drop can easily occur in Poland. If you're shopping for a HOME, and not just an investment, you can find sellers desperate to take lowball offers anywhere in the world these days.......from Dubai to Krakow to Dublin.

Must be great in the US - I know people who live in Atlanta and even before the crash I though property was pretty good value. In the case of the hot spots in Poland e.g. Krakow no one in their right mind will want to buy until there is confidence that the market has roughly bottomed out. That may not even be this year. It will be interesting to hear in the future how people look back on the speculative madness that has been perpetrated in Poland. I do feel that in the future there will not be the same level of naievety among property investors and this will mean that the speculator "establishment" will not be able to make the merry hell that it has to date.