Poland avoided property bubble


#1

In US and many European and Asian countries there was this sudden spike in property prices, but it seems that Poland is actually different - look at this graph - the green line is average price per square meter, as you see no significant drops there. Red line is some theoretical and meaningless model and can safely be ignored. So dear citizens of Ireland when you go for this soccer thing in summer, make sure to buy some real estate…


#2

I thought Polands economy was booming?

en.wikipedia.org/wiki/Economy_of … _of_Poland


#3

Bought a car from a Polish lad three years ago. We had a big discussion on the Irish economy, which he claimed to have learned a lot from. Then he spoke of the apartments he had bought in Poland, and I asked him if he was sure he had learned anything?

His reply was ‘Poland is different’.


#4

He definately learned the correct catch phrases 8DD

Nice graph September.


#5

Poland is different if you are comparing price per sq ft.

In Poland when you buy a new apartment the developer does not supply things like bathrooms, kitchens, etc.

What you get is a shell with a front door (if you are lucky)


#6

… which is great in the way that you can finish your gaff the way you want. To me, apts, estates with same bland finishings are a no no. You get what you get, and remember that these things are included in the price. I would prefer to pay less and finish the way i want.


#7

Is Poland different because before they had a chance to really build that bubble … the shit hit the fan in the rest of Europe & the ECB et al reduced lending down to a trickle ?

I don’t like relying completely on your graph, because if you zoom in on a fractal, it looks exactly like it does from a mile away. So that dip in you graph might be a bear trap, or it might be a bull trap. We won’t know unless we wait a couple of years …

I’d be interested to hear what kind of houses the employees of the Dell factory in Lodz(?) are buying & what kind of multiples of their wages are they paying for them ?

Has the price of farmland increased tracking food prices, or is it trending higher ?


#8

the bank lending in Poland was always quite conservative (or maybe just to foreigners) so I don’t expect the massive price falls in Poland that we had here, although prices are already down approx 25%.


#9

The Swiss Franc carry trade.

$60 billion and counting: Carry trade-related losses and their effect on CDS spreads in Central and Eastern Europe -> voxeu.org/index.php?q=node/3467
20 April 2009


#10

That is what makes Poland different to for example Ireland whose economy has been shrinking every year between 1999 up to 2007 when prices had a peak.

There multiple places to discuss property market, but Poland (or maybe Central Europe) is different. Half of population would earn 8400E p.a.(median), but most typical salary would be 6000E p.a. (mode) - it could be noted that average is about 12000E p.a. As you see our society is has a very big poor population, little middle class and few but very rich people. This means that at 1k/sqm you could buy 18 to 36sqm house assuming that no taxes are paid. However 8400 median is only 6000 after tax. Now Poland is also part of EU and second most important outcome of joining (first it Septmber in Ireland) is that we are now members of common market - it means that petrol, foods, manufacturing goods are at similar prices if not higher than Ireland. This means that well off people are in position to buy PPR, very rich ones can invest, for most of people though this is no longer issue - they just cannot afford to buy anything for many years now. Property is not so hot subject and property investment is even more unusual - I do not think TPP.pl would be possible, it would not even start as nobody would bother banning discussion on property prices and massive part of population have VI in property price drop.

At height of boom banks would be OK as long as following conditions are met:
Loan To Value of 110% or less
Monthly payment 60% of monthly income after tax or less
Length of mortgage 45 years or less
They would also be reluctant to borrow in zloty, Swiss franc was preferred


#11

What’s the average annual wage in Poland? 12-15k euro per year? How much is an average ‘habitable’ apartment in Warsaw or Krakow now? Will you get any change from €150k?

globalpropertyguide.com/Europe/Poland


#12

This is one of the things that Poland absolutely, positively, has to be careful about !

What really fucked the PIIGS was the fact that their economys were on the opposite side of the cycle from Germany; so when Germany needed Low Interest rates, & the PIIGS needed High Interests rates, the Euro got Low Interest rates. Germany calls the shots in the ECB, so if your economy is out of phase with their economy, you need a really good set of regulators to stop the gobshites in the financial services sector from screwing the population for their own bonuses !


#13

I’d have to question that graphs green line. 18 months ago, Month 36 approx on your graph, Polish prices were clearly in decline in my personal experience. I accept with the lack of credit and general pessimism is affecting interest/prices. I also think there is a fall coming but have an issue with the accuracy of the graph.


#14

I know I shoudln’t but man that made me laugh. :blush:


#15


Interesting in so many ways.


#16

Poland short of workers after exodus to Britain and Germany
news.sky.com/story/poland-short … y-11351969

Poland is interesting country to watch now. Big potential for growth(imho at least).

en.wikipedia.org/wiki/Economy_of_Poland#Since_the_2009_financial_crisis


#17

Thanks mz. What’s the situation for Ukrainian immigrants there? Is there a visa system? Does it grant long term right of residency or temporary work permit etc.?


#18

It’s sad for you guys and at the same time, its so funny when I read polish section of skyscrappercity, local media or if you ask people - “only way is up!”/

They build a lot, prices rises a lot as well - 10% YoY and I must say city centre prices seems ridiculous, but there is so much “cash buyers” - I keep thinking of Dublin back in the pre-crash days.

When it comes to old USSR immigrants (mostly UA and BLR) - they are everywhere, mostly lower paid jobs, but I’ve met good few in software development as well. Low skilled are usually here on 6-9 months work permit, shops sometimes organize it so they come for 6 months then they go home for holidays for a month or so and come back on another 6-9 months.
On building sites you hear mostly Russian now :).

According to national bank data (NBP), there is approx 800k, cant find raw data, only article in polish.
A lot of our CSO data is very questionable in this field - they have no real clue how many people are in our major cities, therefore its tough to say whats the correct estimate.
e.g. In Wrocław around 50k new apartments were built in last 10 years, yet official population is almost constant!

edit. some interesting plot left estimated number of UA workers, middle is estimated impact of UA workers on growth in 2014-2018, right is real GDP Yoy: