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Residential real estate values go down in Poland


f stop 25 | 2,513
17 Jan 2012 #331
Regardless what currency they paid for those flats with; money, slavery, ass-kissing, it's probably the only material thing of value they have to pass to their children.

Besides "what they paid for" is immaterial in inheritance, only what it's worth currently.
delphiandomine 88 | 18,455
17 Jan 2012 #332
Regardless what currency they paid for those flats with; money, slavery, ass-kissing, it's probably the only material thing of value they have to pass to their children.

Sentimentality shouldn't apply to economics and social welfare - it's usually what causes much of the mess to begin with.

If they want to pass it to their children, then they should pay the fair market price for it. It's built with public money - why should the public transfer money to a private pocket?
gumishu 11 | 5,696
17 Jan 2012 #333
Sentimentality shouldn't apply to economics and social welfare - it's usually what causes much of the mess to begin with.

most of the mess is created in the economy is created by governments and their wasteful or misguided policies (not to mention the corruption) - a lot is also created by some central banks - like Fed

why should the public transfer money to a private pocket?

it;s by no means a direct money transfer - it's the use of the premises that's inherited and not any kind of ownership
f stop 25 | 2,513
17 Jan 2012 #334
If they want to pass it to their children, then they should pay the fair market price for it. It's built with public money - why should the public transfer money to a private pocket?

What are you talking about: sentimentality? That's what you think about inheritance?
Anyway, maybe their families had the money/holdings that the government took? How far do you go back the make sure the fair price have been paid?

Also, who decides when the flat is too big? And how many people should live in it? That sounds like the good old communist times.
delphiandomine 88 | 18,455
17 Jan 2012 #335
it;s by no means a direct money transfer - it's the use of the premises that's inherited and not any kind of ownership

But it is where the property is/was purchased - that's more or less a direct transfer.

(don't get me started on the insanity of someone with a zameldowanie there claiming rights to the property)

What are you talking about: sentimentality? That's what you think about inheritance?

There's sentimentality in that it was a very popular move to allow people to buy their flats for peanuts - not least because many of the flats were occupied by ex-Party (or ex-Party institution workers). A fair system would have redistributed the flats before allowing people to buy them.

Anyway, maybe their families had the money/holdings that the government took? How far do you go back the make sure the fair price have been paid?

The fair price would have been the market value at the time of purchase - be it 2011 or 1991.

As for the Government taking stuff - well, there are processes to deal with that. It's a separate issue, as I'm mainly talking about new builds (post 1945).

Also, who decides when the flat is too big? And how many people should live in it? That sounds like the good old communist times.

Social housing should be for those in need (and who are deserving, no drunks/wasters) - if someone needs a municipal flat, then they should live in a flat suitable for their needs. Don't you see the insanity of poor families living in tiny flats while Babcia lives alone in a huge flat? Both are owned by the State - and they should switch. Again - you can't allow sentimentality to override logic.
Harry
17 Jan 2012 #336
How far do you go back the make sure the fair price have been paid?

Not a day. Just return to the heir the price the aged relative paid and then let them purchase the flat at market rate (which, I assure you, will suddenly be lower than it is today).
f stop 25 | 2,513
17 Jan 2012 #337
That makes no sense. For example, with this scheme, my son would not be able to affort the house I bought 15 years ago.
delphiandomine 88 | 18,455
17 Jan 2012 #338
Houses are a different story though - we're only talking about the situation where someone has purchased a flat for peanuts, built after 1945 with public money and bought after 1989.
Harry
17 Jan 2012 #339
That makes no sense. For example, with this scheme, my son would not be able to affort the house I bought 15 years ago.

Did the Polish state pay for your house only to see you buy it for peanuts? If not, we aren't talking about the same thing.
f stop 25 | 2,513
17 Jan 2012 #340
I still don't get it.. - you want to kick people out from the apartments they had since the communist times, because.. well.. they lived in the communist times?
delphiandomine 88 | 18,455
17 Jan 2012 #341
No - I want muncipal housing to be allocated on the basis of need (and merit) rather than on the basis of "first come, first served" - especially because the municipal housing was often fraudulently allocated in the first place.
Harry
17 Jan 2012 #342
I still don't get it.. - you want to kick people out from the apartments they had since the communist times, because.. well.. they lived in the communist times?

Nope, if they had lived there since then, they'd have the right to buy it and live in it for ever. I just don't want other people to benefit from that right(although they will for sure).
Foreigner4 12 | 1,768
18 Jan 2012 #343
No - I want muncipal housing to be allocated on the basis of need (and merit) rather than on the basis of "first come, first served" - especially because the municipal housing was often fraudulently allocated in the first place.

let's face it, should your wish be granted, housing will be fraudulently allocated yet again. The less a corrupt system gets involved, the better.
gumishu 11 | 5,696
18 Jan 2012 #344
delphiandomine:
No - I want muncipal housing to be allocated on the basis of need (and merit) rather than on the basis of "first come, first served" - especially because the municipal housing was often fraudulently allocated in the first place.

let's face it, should your wish be granted, housing will be fraudulently allocated yet again. The less a corrupt system gets involved, the better.

very good point - merit my ass when a clerk decides who has got need or merit

Social housing should be for those in need (and who are deserving, no drunks/wasters) - if someone needs a municipal flat, then they should live in a flat suitable for their needs. Don't you see the insanity of poor families living in tiny flats while Babcia lives alone in a huge flat? Both are owned by the State - and they should switch. Again - you can't allow sentimentality to override logic.

while there is some sense in what you are suggesting there no simple solution and I believe there is no viable solution to the issue with the current attitudes in Poland (not that Poland is somehow extraordinarily exceptional here) - be a human also and consider that babcias do not respond to being shuffled around that well

gumishu:
it;s by no means a direct money transfer - it's the use of the premises that's inherited and not any kind of ownership

But it is where the property is/was purchased - that's more or less a direct transfer.

as far as I know since at least 2000 councils don't sell the flats just like that - I don't know if it because of some regulation or it is because they would like to see some proper prices which people are not very ready to pay (it's not really a good investment to buy flats in old kamienicas in my opinion if the price is not significantly lower the the newer-built things)
wielki pan 2 | 250
18 Jan 2012 #345
[quote=delphiandomine]Exactly. As it stands - the nephew can give Babcia a small amount of cash, she can buy the flat - and the nephew can sell it for a handsome profit once Babcia dies. An utter joke in every sense of the word - especially with young people struggling to buy accommodation. I have no issue with Babcia staying there, but when she goes, the flat should return to the State - and - crucially - be awarded not only on the basis of need, but also the basis of deserving.

Mr D, firstly you have a very simplistic opinion view on housing problems in Poland, secondly your belief of state control smell of returning to the bad days of the 50's. Babcia purchased her property at market value of that time, to Westerners this was peanuts. The real problem with the price of homes is the fact that people from the West (people like yourself) bought properties at inflated prices and these prices have set a bench mark, in reality this bench mark is artificial and unrealistic as compared to average wages, this also reflects the high price of renting. Poles for a generation were forced to rent from the state and now want to be home owners overnight, this is not going to happen, it will take a generation to advance from renting to owning and Poles need to take a reality pill to get to grips with this. Germany has a high percentage of people who rent. May I suggest people start with the purchase of a small apartment and then think about upgrading if and when they can afford it. The more people from the west enter the Polish Real Estate market the harder it will be for locals to purchase housing.
PRLowiec
18 Jan 2012 #346
Houses are a different story though - we're only talking about the situation where someone has purchased a flat for peanuts, built after 1945 with public money and bought after 1989.

I don't think you get it,flat was a part of your benefits package in "communist" Poland and all of them were built with public money.Of course not everyone recived one because the system collapsed and sometimes you had to help your case a bit to get it rather sooner than later.It's hard to imagine it in today's crooked system but there wasn't that much of corruption at that time.
RoughFlavors 1 | 100
19 Jan 2012 #347
If anyone has any doubts about how the supposedly "uncorrupted" process of allotment of apartments worked in the past, I would refer them to the first episode of "Alternatywy 4." That was the reality of distributing housing based on "needs."
f stop 25 | 2,513
19 Jan 2012 #348
Mr D, firstly you have a very simplistic opinion view on housing problems in Poland

Hear, hear!
cms 9 | 1,255
19 Jan 2012 #349
So we do seem to have some realization that for ordinary Poles then house prices and deposits are out of their reach - remember my 3000x2 couple are actually far richer than the median household. The solution is to move to Srem and also (nonsensically if you are going to live in the sticks) to give up your car.

But giving up your car would entail new costs - for instance access to the cheapest food is in hypers, access to the cheapest furtniture requires visiting out of town places. Add in an extra bus cost (because you would still need that within the town) and is it worth it ?

Moving to Srem (I havent been to the other places you mention) is not like moving to Connecticut or Surrey. Its a potato field with very little cultural life and almost certainly would be seen as a step backwards. Poland will take another generation before those places are livable.

The real answer is that prices in populated places will drop away from their bubble levels in order to be affordable.

The stuff about the housing giveaway is interesting but it is trying to solve a 1989 problem with a 2012 answer. At the time what was the market rate ? Even now it takes about a month to get a bank loan and a notary sorted - try fixing a price when inflation is 250% per year ? How would the state have paid for the upkeep of those buildings if it held onto them ? the state was bankrupt at the time. Why would the newly free Polish state be more entitled to a kamienica in Wroclaw than a previous German owner ? how would people now finance the repurchase of babcia's apartment - the banks do not have that volume of credit to dish out even after 20 years of capitalizm. And surely they would also want deposits so taking that volume of cash out of the rest of the economy would be crippling.
milky 13 | 1,657
19 Jan 2012 #350
ielki pan:Hear, hear!

I agree.

But giving up your car would entail new costs - for instance access to the cheapest food is in hypers, access to the cheapest furtniture requires visiting out of town places. Add in an extra bus cost (because you would still need that within the town) and is it worth it ?

Yes good point, it's patronizing when you here people from the west telling Poles, they should wear cheap clothes,travel by bus and eat bread and water so they can afford property that was bubbled by the west.
delphiandomine 88 | 18,455
19 Jan 2012 #351
secondly your belief of state control smell of returning to the bad days of the 50's.

State control of municipal housing, allocated according to merit and need as opposed to being in the right place at the right time - what's wrong with that?

Babcia purchased her property at market value of that time, to Westerners this was peanuts.

Babcia certainly didn't pay market value - like the UK's 'right to buy' - the flats were sold for peanuts, even by Polish standards. Or worse still, Babcia didn't buy at all - and she's still living in her huge muncipally owned flat.

Renting is much cheaper than buying right now in Poland - but really, people from the West hardly bought much compared to what the Poles bought. It might be more accurate to say that Poles were the ones inflating their own market, especially in border towns where they could work illegally in Germany. I know one guy who bought himself a nice flat in the early 90's by doing exactly that.

Poles for a generation were forced to rent from the state and now want to be home owners overnight.

Actually - they weren't. There were plenty of flats that were privately owned during Communism - many of the "Spoldzenia MIeszkanowa" type flats were bought upon construction. The real problem is - as I said - the younger generation is priced out of the market by a squeeze of those with foreign income and older people who are inheriting flats.

Germany has a high percentage of people who rent.

Funny you mention this - one big problem that Poland has is that people tend to buy a property 'for life'. They were the ones who took on huge mortgages - and when the CHF strengthened, they were the ones in trouble. I don't understand it - as you say - sensible is to buy small and then work your way up.

But really - people from the West are a minor influence on the Polish market, especially because most of them buy new flats anyway.

The solution is to move to Srem and also (nonsensically if you are going to live in the sticks) to give up your car.

You can have a car, but give up the driving to work. Saves a lot of cash.

There's really not that much difference between supermarkets when it comes to food - all it means is less variety. As for cheapest furniture - van hire isn't expensive in Poland. And people seem to manage just fine in the UK with living outside cities - why is Poland so important?

Poland will take another generation before those places are livable.

There's plenty going on culturally in these places, but nothing "sexy". Perhaps that's the problem - image before substance.

(I'm in the middle of organising a cultural project in one of these towns as we speak - and the support has been far higher than in Poznan)

how would people now finance the repurchase of babcia's apartment - the banks do not have that volume of credit to dish out even after 20 years of capitalizm. And surely they would also want deposits so taking that volume of cash out of the rest of the economy would be crippling.

It's too late now to solve things - the only thing that can be done is to put a stop to any sales of muncipal flats, and to make sure that there is no "inheritance".

The state could easily have charged a market rate. Would've made sense, what with the general use of shock therapy.

As for how they would finance it - they wouldn't. Babcia could continue to rent from the State, and if she can't afford 2000zl payments, then she can downsize. As I said - no room for sentimentality.
milky 13 | 1,657
19 Jan 2012 #352
Renting is much cheaper than buying right now in Poland

YES,this is fact by along shot.

You can have a car, but give up the driving to work. Saves a lot of cash.

oh no,wtf

people from the West hardly bought much compared to what the Poles bought.

I think he means, money in general coming from the west. Poles abroad, foreign investors etc (sick of making this point)

And people seem to manage just fine in the UK with living outside cities - why is Poland so important?

Because!!!!in context, petrol is 3 or 4 time more expensive in Poland.NO?
JonnyM 11 | 2,620
19 Jan 2012 #353
Right to buy gave a fairly hefty discount, but in PL, a lot of those flats were sold for the princely sum of 1 zloty. Plus solicitors' fees.

Renting is much cheaper than buying right now in Poland

It depends where you are - in some parts of Poland the prices are very low and in Warsaw they aren't that high.

I think he means, money in general coming from the west. Poles abroad, foreign investors etc

There isn't much of that.
delphiandomine 88 | 18,455
19 Jan 2012 #354
oh no,wtf

What's wrong with it?

I can take the train to work, or I can drive. I take the train mostly - because it's 35 minutes of relaxing, stress free travel - as opposed to 45 minutes of Polish drivers.

Because!!!!in context, petrol is 3 or 4 time more expensive in Poland.NO?

I've already given you examples where the train service is frequent and reliable here.

Right to buy gave a fairly hefty discount, but in PL, a lot of those flats were sold for the princely sum of 1 zloty. Plus solicitors' fees.

That's a massive social transfer in anyone's book.

And a kick in the face to those who bought flats under Communism too. I doubt Babcia remembers this when voting for PiS, though.
Avalon 4 | 1,068
19 Jan 2012 #355
The real answer is that prices in populated places will drop away from their bubble levels in order to be affordable.

So what is affordable? are you talking of the old communist blocks or new build? you can talk about one income, two incomes, you can listen to Milky who thinks average wage, say 3000 = 18,000 X 2.5 = 45,000 is the sum that apartments should sell for in his socialist, fairyland.

What is the "real answer" CMS. If you show me how you can buy land, build apartments, sell them for 45.000 PLN ( inc VAT + Fees) per unit and make enough profit to keep a business going then I will give you a free partnership.

I have stated before, a couple of times now, I agree that Polish salaries are dire, but, there are still people buying flats in the 200 - 300,000 price range and the developers are announcing new projects weekly so somebody has the money.

Most of the people I sold too were either first time buyers or people upgrading to larger flats, two were retiring (both teachers) and wanted new. The Polish government is going to have to do something but where the money is going to come from is anyones guess.
RoughFlavors 1 | 100
19 Jan 2012 #356
you can't argue with supply and demand and right now there is way more demand than supply. what the government can do is provide for cheaper loans, tax breaks for new construction both to companies and individuals, and generally make establishing and running a business in Poland less hassle-free. once the obstacles are removed, it's just a matter of time when people realize that demand exists at all price points and try to meet it. it's not rocket science, it's economics 101
milky 13 | 1,657
19 Jan 2012 #357
you can't argue with supply and demand

YES you can!! especially when its rigged, Developers buying up land and leaving it purposely idle,(keep supply down) .And governments getting elected on phony promises of providing much needed housing, and instead!!offering grants to help naive people avail of bubble prices,

The invisible hand is in a diamond glove.
RoughFlavors 1 | 100
19 Jan 2012 #358
you really have two choices then - nationalize all land and existing housing and allocate it to deserving citizens (sound familiar?) or put pressure on the government to promote competition in the construction industry, which will create more supply. no developer ever made money on idle land unless there is no competition.
Gustav 1 | 50
19 Jan 2012 #359
The stuff about the housing giveaway is interesting but it is trying to solve a 1989 problem with a 2012 answer. At the time what was the market rate ? Even now it takes about a month to get a bank loan and a notary sorted - try fixing a price when inflation is 250% per year ? How would the state have paid for the upkeep of those buildings if it held onto them ? the state was bankrupt at the time.

Here we see the difference between a know-it all English teacher and CMS who seems to be someone in the finance trade.
Harry
19 Jan 2012 #360
Developers buying up land and leaving it purposely idle,(keep supply down)

Of course, they should actually sell that land at a loss, just as they should sell apartments for less than the cost to construct those apartments: people who can't be bothered to work hard have a God-given right to own an apartment, right?


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