Residential real estate values go down in Poland

That explains some things. It's in the best interests of the realtors to insist that nothing's wrong.
Salary to cost ratio out of whack? - no problem! Get that 50 year mortgage!

Which word of the phrase "commercial real estate" are you failing to understand?

why would you assume I'm failing to understand it? Maybe you're missing the point?

You say:


Pip's husband is not a realtor in the sense of selling residential property.


So companies have salaries and take out 50 year mortgages, do they?

WTF are you talking about?
This is a prime example of arguing for argument's sake. Now you want to argue about the differences between commercial and residential real estate?

Really?
Is that going to change the fact that the real estate prices in Poland are out of whack with the salaries?
Since ALL realtors loathe the "bubble" word, you can call it anything you want, and keep attacking anyone that uses it to your hearts content. Nobody sane thinks that prices are going to go up now.

You making comments about Pip's view being explained by the fact that her husband is in commercial real estate.


And that is your definition of "bubble" is it? Prices not going up = bubble? Nice.

you keep grasping at fringes, parsing sentences to find holes and baffle with bullsht - do yourself a favor and look at the big picture.

commercial and residential in Poland are two completely different things. Rents haven't gone down since drastically in this market either.

The big picture being that there is not now a bubble in the Polish residential property market and never has been.

maybe if you thought about what your definition of the "bubble" is, it might diffuse some of this animosity.
It is not such a "black and white" definition, like pip thinks.
For some, more sellers than buyers is a bubble already.
What is yours?

rents won't go down drastically for some time until there is serious cooling of the economy with because of first price hikes (with much lower salary rises to acompany them) and second a bit delayed job losses that will follow the price hikes - and the price hikes are pretty inevitable (with the perspective of the zloty losing more of it's value but not only that) - rents will not go down drastically in 2 or 3 years because there just aren't millions of empty flats awainting to be occupied (though there is a considerable problem for developers to sell flats already)

It is not my definition.


Yes there is.


Those people clearly do not know what the word 'bubble' means.

No, it is not. You don't want to commit to yours, do you.


Maybe you just want to keep arguing about it.

In commercial property and rents are most decidedly going down in warehouse, industrial and in retail. Not sure about office. Sales prices are also very depressed.

For residential well we keep being told there is a specific definition for "bubble" but if you google "property bubble definition" you get wikipedia and investopedia. If you know of an official definition then maybe supply it ?

I will give one of my own - a developer builds a modest 150 sqm house in a boggy field 15km from the middle of Warsaw with a commute that you would be lucky to do in an hour. He initially decides he wants 350.000 euro for this in a town where the average wage is 12.000 euro per year, i.e. a 25x multiple. After thinking it through he decides he was joking and actually it is now worth 40% less than his original offer. That story is being repeated in hundreds of developments accross Poland at the moment.

My own personal definition of 'bubble' is my story. Raced to get something in 2007, because I thought we'd be priced out. Spent more than I wanted. Then everything cools off and my property is worth less than when I bought it. Now we want to leave Poland, but can't sell the damn thing without losing our *ss. Yes, I know you're thinking that I deserve it for being so stupid, but there was a lot of emotion in decisions being made, and not only by us.

From a report about office space which I read recently:

Having no dog in this fight, I would be wary of a source whose financial health or that of their spouse depends on there not being a "bubble" of any kind; based on source alone it serves their interest to deny that a bubble exists and encourage as many people as possible to do the same. Nothing against, pip (sometimes I agree with her and sometimes I don't) but it's like accepting the validity of a news story from a controlled source- sure it might be accurate but it'd be silly to put your trust in that source.

That being said, this is all just a big argument over semantics. Is the real estate market going to come crashing down in Poland? I don't know about that but the patient is in dire need of medical attention.

200% + capital appreciation within two years on specific inner city developments, thats a bubble.

Whats happening right now could be referred to as a market correction, but there has been a bubble.

Those developments would very much be the exception and not the rule.

about 5 pages ago I posted a really good link by a few experts that discussed the situation with regards to residential real estate in Poland.

with regards to the above scenerio about an osiedle 15 km outside of warsaw and then the developer dropping the prices by 40%.

This is the situation now. There is osiedle "Le Village" in Piaseczno- the prices when during construction were close to 1 million and yesterday I saw the billboard advertising 699,999 for a a segment.

In Janki there is osiedle sosnowy doliny- exactly the same price 699,999 and they started at 1.2 million for a segment.

The drop is large yes, but now the price is reaching a fair market value. Developers have inflated their prices so much that they can afford this 40% drop and they will still make money.

A "bubble'" is a defined term. This why I am arguing- there is a definitive definition in all real estate "bibles" that explains what a bubble is. not a wiki pedia entry or whatever.

it is easily googled and defined on any good real estate website.

so once again- based on the actual definition of what a real estate bubble is---there is no bubble in Poland- yet. and the thing is typically you can't define a bubble until after it has happed

so what we are experiencing in Poland is a dropping of prices and a leveling out to reach fair market value. If in the next two years the prices drop by another 30 to 40% then we have a bubble- but again- we can't define it until after it has happened.

So what is that definition ? We are lambs in the wilderness in our ignorance. Please help us with the bible.

You can spot a bubble beforenit happens. We have one now and it's going to pop

don't be obtuse. In order to be an agent- commercial or residential it is necessary to be licensed. nothing new. and in order for this to happen you need to take courses and pass these courses- which all are about real estate- both residential and commercial. the books for the courses are considered "bibles" in real estate because the discuss every picky detail- of which one is the bubble.


you don't know this until it happens.

no harry - your typical block-of-flats appartment gained more than 150 per cent from say 2003

In theory, Pip is correct.

How can you call a bubble until it has popped, you may believe that Poland is going through a ' Economic bubble' this is not a property bubble as truly defined, you can say ' The USA went through a property bubble because it has popped. I would like to know, how much has the money supply increased by, in Poland since 2003 and are we in an illusionary period of wealth in Poland?

Any idea?

They certainly didn't go up by 200% in two years.

And you also have to remember that while we have seen massive growth (places tripling in value in a ten year period) in the major cities, in the minor citites prices are far far lower. For example, in Slupsk you can get a 40m apartment in the city centre in fairly decent condition for as little as 100,000zl, and those places cost a lot more than 30,000zl in 2001.

yes it is true that flats cost much less outside big cities - but they gained value on the same scale - my mum bought a studio flat in a very small place in Opole region in the year 2000 for 120 000 PLN and we sold in in 2008 for 330 000 PLN

Well, that same flat in Slupsk was apparently 50,000zl in 2001 and has had at least 10,000zl spent on it since then, so it hasn't even doubled in value.


So you got in the region of 10,000zl per sq m? That's pretty much Warsaw prices!

oh, sorry - one magnitude too much (I mean cut one zero in both prices) :) - my mistake - you know I sometimes still count in old millions when 33k PLN was 330 millions in old money

so why can't you, or Harry, tell us what it is?

So it was possible to buy an apartment for as little as 33,000zl at the peak of the market? So much for the great bubble!