Residential real estate values go down in Poland

My estimations (were)are not unconditional, I mentioned from the very beginning that the property bubble is largely influenced(driven) by Poles working in the West. Prices will drop(crash) to 2006 or late 2005 prices if these Poles return, or if their is a serious economic collapse in the West (which could(I hope not) be on the cards). There seems to be no sign of Poles returning from abroad(surprise surprise), and if the West doesn't collapse, Polish property prices may only fall 15-25% by the end of next year.

And!..... comparing car and oil prices to real estate prices in Poland is laughable, surely a developer can't be that thick.

In your haste to make a cheap shot, you failed to include the full quotes from Socialism Today:

socialismtoday.org/154/abyss.html

They have lent money to banks in exchange for assets such government bonds as collateral. Buying bonds is banned, even via the IMF scheme that has today been vetoed by the Bundesbank.

i don't know if this is all correct, but prices are certainly not going down.

There was no intention of a "cheapshot" and I certainly do not read "socialist rags", socialismtoday.org/154/abyss.html?, this explains a lot about your animosity but lets not drag this down to your level.

This is the link you need,,,,,,,,,,,,,,

iiea.com/blogosphere/the-legal-constrain ts-that-bind-the-ecb

Its a bit long but you will see that the Greek, Irish, Portuguese bailouts were all illegal

Just the important bits:-

"Few people, however, bother to examine the treaties and there has been little debate on this important area. Article 123 of the Lisbon Treaty prohibits the ECB and the national central banks from lending to governments. It is quite explicit and was designed to encourage fiscal discipline and protect central bank independence. It is replicated in Article 21 of the Protocol on the Statute of the European System of Central Banks and the ECB which provides that:

In accordance with Article 123 of the Treaty on the Functioning of the European Union, overdrafts or any other type of credit facility with the ECB or with the national central banks in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the ECB or national central banks of debt instruments.

What the EU has done is illegal, it seems you do not understand, so don't go on about Germany objecting to this, they were implicit, even to the point of breaking their own laws.

Call it a fudge, a slight bending of the rules etc,its still bloody illegal. Anything to save the Euro.

If you are going to have a go, at least read up on your facts first. I have a 5 year old daughter who is better with financial matters, perhaps you can explain to her how her pocket money is a "Ponzi scheme",

Pratt.

wow- you pretty much make up your own history.
no where did I compare car, oil or real estate prices in Poland. what I said was that developers are now offering "perks" such as a mini cooper. will this cause somebody to buy a 2.5 million pln house over a 1.5 million pln house- clearly no. but somebody looking for a 2.5 million pln house in a upper scale neighbourhood of warsaw may be enticed to buy a house there if they get the car for free. and no, I am not stupid enough to think the car is actually free- but some people are.

He wasn't referring to you, but to the pie head developer.

This what I mentioned


You know exactly the project I am talking about it is on the the opposite side of the road to GTC and they slashed their properties by 40% on phase 1.Regarding Osiedle Konstancja [konstancja.pl] I am sure that if I walked in today and negotiated for a house of any size I would at least get a 20% discount, especially if it was built. That whole area from Zawady to Konstancin strefa A has seen big price falls. Konstancin-Jeziorna has been the worst hit. You know this as well as I do PIP, so please we should keep to the facts.

Euro-denominated debt isn't looking too popular in central Europe these days, with spreads in Hungarian and Polish euro bonds widening over the yields of dollar bonds with the same maturities.

Hungary - and to a lesser extent Poland - have been suffering from their exposure to the economies and banking systems of the euro zone.

blogs.reuters.com/globalinvesting/2011/12/12/euro-debt-toxic-in-central-europe-too/

13/12/2012

1 Euro - PLN 4.55
1 USD - PLN 3.46

Oooooooooooo!!!.sticks and stones!!!!!!

With the absence of facts, anything goes?


Two of the most expensive items that anyone will buy in their lifetime. Both have to be manufactured/produced, most people class these items as necessities. I fail to see how using them as a price comparison is so hard for you to understand. They both require materials and labour which require a finite price level at which they will not be produced on a commercial basis. There are always going to be prototypes which the manufacturer will sell for a loss as a showpiece of their skills and for avertising purposes, but, these are the exceptions.

In the "real" world, (not the socialist one) no developer/manufacturer, is going to sell for below cost price.

with all due respect sir, I live in this area. I know exactly how much the houses are here. Osiedle Konstancja is still selling 2.5 to 3.5 million. There are osiedle's in Zawaday still at 2.5. The prices are not dropping. In my osiedle- the prices are exactly the same as they were two years ago.

could you get a discount for 20%? absolutely, but that doesn't mean that there is a property bubble. Prices are leveling out to get closer to market value and buyers have more choice. The market is saturated.

Can't you get it into your head that there are fundamental differences between consumables (food, petrol and cars) and assets (land, houses).

Sure houses wear out, but in a time scales ten to a hundred times longer than a car. 99% of all property is not manufactured but is already in existence in any year so the price is determined by the existing stock not the cost of building, and the price of existing property is mainly about the cost of land.

And how much of the housing stock in Poland has been replaced or added over the past 30 years?. By the existing stock, do you mean the communist blocks that were erected between the 1950's up until the 1990's, the ones with the cladding on the ends and the ********* in the cracks/joints to stop moisture ingression, the ones that were built to last 50 years?. You imagine that to own one of these is the aspiration of most Poles?

The existing stock was built as cheaply as possible do how does this affect todays prices?
Like Milky, you cannot put together a cohesive argument and have no understanding of the subject. Nexy year will be my 40th in the trade which has given me a good overview on the current situation.

You may hate developers, but, someone has to do it.

Why has the word ***********" been censosored? it is a tar like sustance used in waterproofing?

no need to appear defensive

it is a decent profession. what Joe Shmoe in the street fails to realise is the inherant risk involved in developing.

fair play to you for sticking your neck out

There are houses in Zawady that have been for sale for the last 5 years and can't sell.

The prices being offered today in all of the following have dropped from 2008

harmonium.sjm.pl
konstancja.pl

Rezydencja królewska

The prices all over Warsaw have dropped because there was a price bubble ( inflated price which was not sustainable). We own 8 apartments in mainly high end residences in the centrum/Zoliborz/Mokotow dolny, most of them bought between 1997 to 2006 with the exception of one that was finished in 2008. In all of these properties if I sold today I would receive less than what my neighbors have sold for previously. We also have a house that is rented out to a company in Zoliborz stare, if I sold it today I would receive less per m2 than my neighbors have sold for in the past, the house two doors away has been on the market for 7.8 mil for nearly 18 months with no buyer, he dropped it from 9 mil. Having invested in real estate since 1993 in Poland, I considered myself quite knowledgeable about the warsaw market.Out of all the people I know personally in Warsaw involved in residential real estate either investors or developers, not one person has informed me that their Warsaw property investments have not gone down in value since the 2008 crisis began. I understand that real estate is an alternative asset class,there is no exchange to determine prices's like the stock market for example, prices are set by buyers( price paid) not by developers asking price.

The claim that your Osiedle has not seen any price drop, leads me to believe I should be seeking your advice for my future selections.

Completely irrelevant.

what can I say- it is true. my husband is also in real estate and i deal indirectly as well.

The prices being offered today in all of the following have dropped from 2008

oaklandpark.pl/upload/cms/lokalizacja/dojazd.pdf
harmonium.sjm.pl
konstancja.pl

Rezydencja królewska

of course they have dropped- they were hugely over priced and now they are leveling out to market value. there is no bubble- the houses are still selling. people are wising up. why buy a house where the konstancin bottle neck begins. why buy a house in zawady where the traffic lights are stupid full at vogla.

when we bought our house we looked at all of these things. incoming outgoing traffic, access to schools, privacy, security- traffic was number one- after living in piaseczno for 5 years I was done with Pulawska.

look at the osiedle's that are still being built out there. besides the massive miasteczko wilanow- which incidently will see construction start on a mall bigger than galeria mokotow- there is an exclusive osiedle- residencja palac next to the stables and another one a bit further down from that. all high end houses that will easily start in the 3.5 range. and of course there is a new osiedle that will be lux on the edge of kabaty forest.

I am not arguing that there is a decrease in prices- this is evident. i am arguing that there is no bubble. a bubble is defined as massively inflated prices followed by a sharp drop. There is no sharp drop- there is a leveling out to reach fair market value.

incidentally when we were looking to buy there was an osiedle next to ours that were selling for 2.5 million- but you had to finish the elevation and fence and garden and a few more things like windows and garage by yourself. there were maybe two that sold- they lowered the price to 1.5 million and they all sold this summer- it was unbelievable.

Do you mean Harmonian Pip?

no- between konstancja and zawady- i don't want to give too much of my personal information.

i am curious about the prices of osiedle patio- we looked there too. the houses are great but the access is not great.

There is a rather large difference between a bubble and falling prices. My own place has gone down by about ten percent. Personally I'd like to see prices fall further (I'm looking to buy a bigger place) but I doubt that the prices for what I want (70+ metres, pre-1960, in the ghetto) are going to fall much further.

understandable.


Harmonian is the one opposite the ASOW, the prices there went from 2.5 Mil to around 1.5 Mil last year.


Osiedle Patio close by the Botanical gardens dates back to about 2000-2002 if I m correct, they also sold plots, as the houses are not uniformed as in Konstancja. I have not followed the prices there I remember seeing houses for around the 1-1.2Mil then they seemed to jump to around 1.5-2Mil mark in the heady days. There was a large parcel of agricultural land sold around 2003 that was bought up individual groups who have changed the status to budowlana. in Klarysew at the top by the forest. I am sure they will all start building or selling soon.


There was a building which was built around 2002/3 on ul Nalewki, I have seen some apartments being offered there at good prices, its a good location 5 mins walk to Rat Arsenal metro, 2 streets away from the Ghetto monument. The sizes go up to 110 m2


Most of the flats in the Ghetto are 26-56 m2, may be very difficult to find a 70+ pre 1960.

I know the one you mean and have looked at a flat in it. Good location but the layout of the flats is far from ideal and most of them seem to have been finished to very much suit the taste of the original buyers. If I have to rip out a kitchen and bathroom, I want the price I pay to reflect that!


There are a few larger ones. Mostly side-by-side flats that have been knocked into one or upstairs/downstairs things, or ones wholly or partly in converted loft space.

Now you are showig your ignorance.

Just to keep thing in context, check the price here from countries were the wages are 4 times higher.

findaproperty.com/searchresults.aspx?edid=00&salerent=0&regionid=141

daft.ie/searchsale.daft?s

I very much doubt that wages are 4 times higher in Ireland at the minute than Warsaw, so a sense of perspective might be useful.

Not sure if this meets your definition of "levelling" but PKO the biggest lender are forecasting a 30% drop in next 2 years

Housing prices in Poland will fall also in the next year - forecasts PKO BP , the largest player on the mortgage market . Analysts do not rule out that the bank's nightmare scenario , that is dramatic depreciation of housing.

We got to the latest report of PKO BP , which states that at least the middle of next year most likely is to "keep a small downward trend in prices ."

I've already nailed my own colours to the mast at 20%.

it'll do. Prices in Poland have been inflated- I think 30% as an average is pretty fair. Some places will see more and some less.

Very negative, and honest article, but if google translator is doing its job, I undestand that the risk is 25% that there would be a drop by up to more than 30% (headline itself doesn't reconcile to the body if the translation is good 30% vs >30%)

Analysts admit PKO BP, however, that there is a risk that within two years, prices could fall by up to more than 30 percent.! The probability of this scenario - as a result of "relapse recession in the global economy" - is, however, "less than 25 percent.." Let us add that the trouble wpadłoby then many existing borrowers. Growth franc exchange rate has meant that now, even 150-200 thousand. of them have flat burdened with debt, which exceeds its value. These borrowers had lost their jobs, they could not save, sell house - obtained in this way, the money would not be sufficient to repay the loan. Changes in market prices real estate analysts, PKO BP monitor with particular attention, because almost every fifth dollar of all granted loans in our country mortgage from the bank. Bankers are concerned primarily large

This offer here at over 4 millions zl should definitely drop : Also it is a stan deweloper which means you need to finance the interior extra! Wow

I read it as saying that prices could (could as in one in four chance) fall as much as 30%, not that they will fall by that much.

Of course they could fall that much, but I very much doubt that they will (although I would love to see them come down by that much).

If you have got euros to invest today, taking into consideration that the average EUR/PLN was about 3.80-1 over the last 2-3 years. At Euro/PLN 4.6-1 plus the decrease in prices 10-12% you are already close to - 30%.

yeah because the buggers aren't planning on handing out any more mortgages, they've had their fingers burnt good and proper.