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Poland house prices recovered faster - Summary of 2010


Harry
24 Apr 2011 #31
"A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. "(Property - Check)

What is fraudulent about a legal transaction in which the buyer and the seller agree on the value of the property being sold? Answer: nothing. That is one of the reasons why real estate in Poland is not a Ponzi scheme.
milky 13 | 1,657
24 Apr 2011 #32
The Polish property bubble is a classic example of a ponzi scheme..

What is fraudulent about a legal transaction in which the buyer and the seller agree on the value of the property being sold?

The fraud is the fact that the architects, manipulate the transaction, in order to give an illusion of fair play.
Avalon 4 | 1,068
24 Apr 2011 #33
The fraud is the fact that the architects, manipulate the transaction, in order to give an illusion of fair play.

I thought you were just stupid and ignorant until I read this, now everyone is able to see what an idiot you are. What the hell has an architect got to do with an agreed price between a buyer and seller? An architect designs a building, its of no interest to them what the building sells for. Perhaps, you meant the "estate agents", no matter, you usually get all the facts wrong anyway.
peterweg 37 | 2,319
24 Apr 2011 #34
What is fraudulent about a legal transaction in which the buyer and the seller agree on the value of the property being sold? Answer: nothing. That is one of the reasons why real estate in Poland is not a Ponzi scheme.

And how do the 'agree' the value of property? Simple, the buyer sells it for more than he paid. The seller buys in the belief he will be able to sell it on latter for a higher price. This continues until a bigger fool cannot be found or a bank can/will no longer lend. A classic Ponzi scheme.

So your one reason why its not a Ponzi scheme, is actually evidence that it is.
Mark76 - | 20
24 Apr 2011 #35
Ok for the benefit of Milky and peterweg a Ponzi scheme is....

A type of fraud that uses money from new investors to pay off earlier investors, while promising high rates of return. Ponzi schemes generally unravel when the pool of new investors dries up.

Whether you think property in Poland is overvalued or undervalued, the Polish proerty market is NOT a ponzi scheme.
peterweg 37 | 2,319
24 Apr 2011 #36
So the sum total of you argument is; "I don't think so"

All property markets work in the same way, Poland isn't any different.
Mark76 - | 20
24 Apr 2011 #37
No, the Polish property market (and all others) are not Ponzi schemes because they don't fit the definition of a Ponzi scheme.
scottie1113 7 | 898
24 Apr 2011 #38
And proprty markets which consist of transactions at an agreed upon price between buyers and sellers are not Ponzi schemes. If you need the classic example of one, google Bernie Madoff. His was a 50 billion dollar Ponzi scheme. Real estate in Poland or anywhere else is not. If a buyer pays an inflated price in the hope of subsequently making a profit but doesn't, well, that's just a poor decision on his part. It happens everywhere.
pawian 178 | 15,506
24 Apr 2011 #39
In 2010, house prices responded more quickly to the economic recovery.

Good. Now I will sell all my houses and buy Wawel Castle.

As I am going to make it my private property (NO TRESSPASSING!!) upon the purchase, can you try to finish visiting Wawel before the deal?
peterweg 37 | 2,319
24 Apr 2011 #40
And proprty markets which consist of transactions at an agreed upon price between buyers and sellers are not Ponzi schemes.

Bullshit. There is no definition of valuation of an asset.

How much is an house worth?

Well, it DEPENDS.
scottie1113 7 | 898
25 Apr 2011 #41
Yeah, it depends on what other similar houses in the area have recentlly sold for, and on what a buyer is willing to pay for it. The only bullshit here is your insistance that it's a Ponzi scheme, which it's not. Do your research, man.
poland_
25 Apr 2011 #42
Ponzi scheme.

A Ponzi scheme is an investment structure, where fresh money coming in, is used to pay off existing shareholder dividends, therefore there is no asset base. If you buy real estate, you are buying a physical asset. You are making the mistake of comparing a Ponzi scheme to an Asset bubble, the root of an Asset bubble is unregulated cheap money, freely available loans. After the financial crisis of 2008, Polish banks have tightened their lending policy, resulting in less buyers with access to funding, which has created an oversupply of units and a softening of prices, as developers cash up stock. It is not a crash, it is a blip. Having said that it will be some time before we start to see any big price swings again, but there will be no crash. Unless of course the US $ collapses, then we are all f*cked no matter what you are holding. If the US* collapses the best investment would be a farm.
grubas 12 | 1,390
25 Apr 2011 #43
Good. Now I will sell all my houses and buy Wawel Castle.

Perhaps you are also interested in Sigismund's Column?I would sell it cheap.
Harry
25 Apr 2011 #44
How much is an house worth?

A house is worth what somebody will pay for it. If somebody buys a house, by definition we know what it is worth, because somebody has just paid that much.

The Polish property bubble is a classic example of a ponzi scheme..

Yet another classic example of Mark having no idea what he's talking about.

You are making the mistake of comparing a Ponzi scheme to an Asset bubble,

No, I'm pointing out that the property market in Poland is not Ponzi scheme, although it could be a bubble. Our resident property expert, milky mark, is insisting that it's a Ponzi scheme.
peterweg 37 | 2,319
25 Apr 2011 #45
A house is worth what somebody will pay for it. If somebody buys a house, by definition we know what it is worth, because somebody has just paid that much.

Why then, would it change in value?

Some **** poor attempts at explaining why property isn't a Ponzi scheme, abject fail.
poland_
25 Apr 2011 #46
No, I'm pointing out that the property market in Poland is not Ponzi scheme, although it could be a bubble. Our resident property expert, milky mark, is insisting that it's a Ponzi scheme.

H, my post was aimed at Peterweg, anyone that insists the Polish real estate market is a Ponzi scheme, need to read this

google.com/search?&q=what+is+a+ponzi+scheme
terri 1 | 1,665
25 Apr 2011 #47
After purchase, the price of a property/real estate can go up as well as down. If the market falls, then the property you purchased few years ago, may have to be sold for LESS than you paid for it.

A property is only worth as much as somone is willing to pay for it, so the fact that properties are on offer for X amount, does not mean they are worth that much.

When money is easily available, people can obtain mortgages (sometimes over 100% of the value of the property/real estate), however during unemployment and depression, banks do not lend, people can't pay and have to sell.

Properties are now being sold in Poland through auctions - where there is no chance of the vendor/seller getting the price they paid.

How is this a Ponzi scheme?
peterweg 37 | 2,319
25 Apr 2011 #48
y post was aimed at Peterweg, anyone that insists the Polish real estate market is a Ponzi scheme, need to read this

Did you actually read it yourself?

I already posted the description of a Ponzi scheme, please explain how the Property is NOT a Ponzi scheme. Please, refute
the facts with more than 'no it isn't' and 'READ THIS'

Lets take Wikipedia's explanation

"A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. "(Property - Check)
"The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee (Property - Check) ,
"in the form of short-term returns that are either abnormally high or unusually consistent."(Property - Check)
"The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going."(Property - Check)

So, yes, the property market is a Ponzi scheme. A nice, legal, safe, predictable one but with the same end result - the suckers who bought at the end get shafted.

Harry
25 Apr 2011 #49
How is this a Ponzi scheme?

It isn't. However, some people do not know what a Ponzi scheme is, and so they insist that it is one.

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors.

Legal transactions in which the buyer and the seller agree the value of the property are not fraudulent.
And who is the 'organisation' which earns profits?
peterweg 37 | 2,319
26 Apr 2011 #50
It isn't. However, some people do not know what a Ponzi scheme is, and so they insist that it is one.

Well you have had ample opportunity to provide an argument or explanation as to why property is not a Ponzi scheme and failed.
alexw68
26 Apr 2011 #51
No, Peter. Four or five posters here have stated correctly that it isn't and why it isn't. It just requires a little mental precision on your part to get the drift. Lose the mental block you and milky seem to have about how financial and other markets actually work and you might get there. A gentle reminder:

What is not a Ponzi scheme?
Any situation at all in which investor A buys at the bottom of the market having either the capital or good sense to do so, and sells later to B at the market's peak, the prices of both transactions being determined by the market. That's just good investment.

No fail. Not on our side of the fence, anyway.
poland_
26 Apr 2011 #52
(Property - Check. In that situation, as it a legally allowed scheme, the crash happens when the world runs out of money)

When the world runs out of money, which is highly unlikely, as they would print their way to hyper inflation, at that point the best investment would be real estate and land as it would have an intrinsic value.

Stop arguing for the sake of arguing. You are wriggling like a slippery pig, every time someone rebuffs your statement, you come back with something more ludicrous.

Did you actually read it yourself?

Yes I did read it and I understand it, do you understand what is written or do you need someone to explain, the mechanism to you.
terri 1 | 1,665
26 Apr 2011 #53
For those 'in the know' - buying and selling property is NOT a Ponzi scheme. Stop insisting that it is, as you only show your lack of knowledge of what a Ponzi scheme is. You have no idea, yet speak with some authority on a subject that is beyond your comprehension.

People have been buying and selling properties/real estate since Adam was a lad and everybody is happy with the way the system works.
You want something, you know the price, you either accept it and buy it or you move on. This is the way it will always be....
Wroclaw Boy
26 Apr 2011 #54
People have been buying and selling properties/real estate since Adam was a lad and everybody is happy with the way the system works.

Only people that can afford nice properties are happy with it.

You want something, you know the price,

what if that person doesnt have money?

This is the way it will always be....

You sure about that?

the prices of property in developed countries are just another extension of the corrupt nature of the monetary system, i dont think its fair that my parents were able to buy a large four bedroomed house for about £20k, the mortgage could be afforded on a single persons average wage, now a days both average income parents need to work, put their children into care just to able to get buy.

Which ever way you cut it the explosion in Polish property prices was just ridiculous and totally priced the average citizens out of the market.
poland_
26 Apr 2011 #55
WB, have you watched this yet ?

New rules of the game.
video.google.com/videoplay?docid=112129377629231653#
terri 1 | 1,665
26 Apr 2011 #56
Wroclaw Boy-
If you haven't got the money - you learn to do without.

...Just for clarification...Please tell me what other way will people buy and sell properties and WHO will determine the price of a property/real estate......if not the market?

Sure, its unfair, as I remember when you could go on a night out, get drunk, have some chips on the way home and still get change from a fiver - good old days, but life moves on. And another thing - you can't beat the system.....no way.
Harry
26 Apr 2011 #57
Well you have had ample opportunity to provide an argument or explanation as to why property is not a Ponzi scheme and failed.

The only failing here is you failing to understand what a Ponzi scheme is.

We can argue about whether property in Poland is over-priced or not, there is room for opinion there, but not about whether the property market in Poland is a Ponzi scheme: it is not and can not be!
poland_
26 Apr 2011 #58
Which ever way you cut it the explosion in Polish property prices was just ridiculous and totally priced the average citizens out of the market.

No one is disputing that real estate prices in 2008 started to reach dizzy heights, a lot of this was due to the ease in which people could get a mortgage/loan. In 2011 the tables have turned, As Avalon pointed out in an earlier thread, the market has re-aligned itself. Developers are now focused on apartments/flats of 40-70 m2, as well as houses 120-180m2 on the outskirts of the city, to bring it more in line with what the rising middle class can afford.
Wroclaw Boy
26 Apr 2011 #59
Sure, its unfair, as I remember when you could go on a night out, get drunk, have some chips on the way home and still get change from a fiver - good old days, but life moves on.

Ones inflation the other isnt, huge difference, i assume you dont need me to explain.

..Just for clarification...Please tell me what other way will people buy and sell properties and WHO will determine the price of a property/real estate......if not the market?

You said

This is the way it will always be....

and i said

You sure about that?

I really dont have the time to explain any further, but just think about this, do you think that 10 thousand years from now (assuming the earth is still here) we would not have evolved from the old monetary system?

And another thing - you can't beat the system.....no way.

You sure about that?

WB, have you watched this yet ?

Not yet, i'll try and check it out later im a bit busy at the moment.
terri 1 | 1,665
26 Apr 2011 #60
Wraclaw Boy...

...I don't really think that I am concerned very much about the situation 10,000 years from now and no we will never evolve from the monetary system, as there is nothing else to replace it with.

Next you'll be telling me that the Government will provide everybody with housing, nobody will ever work and they will just sit on their bums watching TV...yeah, dream on...

And yes, I am absolutely positively sure that ...you can't beat the system...Many have tried, but you just can't do it and that's that.


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