Well that is remarkably close to the wikipedia definition. If Milky were to quote that then no doubt Harry and Delphian would be deriding his dodgy source

Wikipedia is only as good as its sources. And, unfortunately its subject matter, which is why the articles about things like Polish history tend to be so poor.

But I agree its a reasonable way to look at it. Presuming you understand intrinsic value, you will agree that it is the present value of the future cash flows from an asset.

Funny how you only use half the definition, I wonder why that might be.

after tax and costs have about 1100 in my pocket

You don't feel that you're putting yourself at somewhat of a disadvantage by not following what seems to be prevailing market practice with regard to rents?

That is circa PLN 7k per sqm and 86% above the intrinsic value. Asking prices for this type of flat are indeed 6-7k per sqm.

So you are expecting an 86% fall by when?

Of course you could argue about every assumption in my calculation

Or one could present an alternative calculation. In 2000 I was renting a 39 sq. m flat in central Warsaw for 2000zl per month (which was the market rate), using your calculation of (12 x rent) / 7% would give us an intrinsic value of 342,857zl. But I managed to buy a flat which was 25% larger and only 500m away for 171,000zl that year. This might suggest that your calculation is less than accurate. However, the market rent for that flat would still be in the region of 2000zl per month (so still 342,857zl) and while the asking price would probably be 11,000 or even 11,500zl / sq. m, actual sale prices would be more like 10,000 / sq. m. Not such a huge difference between market price and intrinsic value there.

the general theory is correct - that relative to intrinsic values then there is a bubble.

You've presented a calculation showing there is. I've done an identical calculation which shows there is not. And another calculation showing that either property in Warsaw was undervalued by 50% in 2000 or that the calculation in question is not hugely useful.

But, given that you accept the definition of bubble as a "reasonable" one, could you perhaps be so kind as to explain how the current real estate market in Poland meets the "trade in high volumes" part of the definition?