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Polish apartment prices continue to fall

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milky Threads: 20
Posts: 1,802
Joined: Oct 26, 2009
  ♀ Feb 10, 2012, 08:24pm  #

pip:
I gave you two in Warsaw.

Data on January 2012 real estate prices Poland.



Wroclaw Threads: 82
Posts: 7,598
Joined: Apr 1, 2006
 Photos: 2  ♂ Feb 10, 2012, 08:30pm  #

milky:
Data on January 2012 real estate prices Poland.


use this as a guide. check it again in three months: http://www.mamdom.com/searchpolishproperty-domy-sprzedam-dolnoslaskie. htm


milky Threads: 20
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  ♀ Feb 10, 2012, 10:54pm  #

Mamdom hahhaha, I think I'll pass on that one.


wildrover Threads: 159
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Joined: Jun 7, 2007
  ♂ Feb 10, 2012, 10:59pm  #

Apart from Milky Mark...is there anyone who actually gives a Donald duck about this....?


pip Threads: 20
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Joined: Jul 4, 2011
  ♀ Feb 10, 2012, 11:17pm  #

not really, I just don't like misinterpretations of the market being spread like it is fact and truth.


Wroclaw Boy Threads: 83
Posts: 7,083
Joined: Jul 3, 2009
 Photos: 4   ♂ Feb 10, 2012, 11:30pm  #

milky:
Mamdom hahhaha, I think I'll pass on that one.

agreed, that Tim Hill chap is something else.

Some interesting extracts from the man.

So does it mean Polish property has performed so badly? Actually the reality is probably that it has performed a little too well compared to neighbouring countries.

Over the border many foreign investors are sitting in negative equity and those who have borrowed to buy simply cannot sell

So Poland is one of the few countries where buyers can actually sell and get their money out should they need to. Although many who I have spoken to are reluctant to do so.

the rents are affordable to the local population

Around two years ago someone buying an apartment for 500,000 PLN would have needed to transfer £83,000 from the UK. If they sold now for the same price the funds that would end up in their sterling bank account would be £111,000. Now £28,000

I especially like the last FX point, he does fail to mentoin though that you could have quite easily lost 20% depending on the months, the GBP - PLN exchange rate has been volatile for years.

Source

"We are on a spaceship; a beautiful one. It took billions of years to develop. We're not going to get another. Now, how do we make this spaceship work?"


milky Threads: 20
Posts: 1,802
Joined: Oct 26, 2009
  ♀ Feb 12, 2012, 01:44pm  #

Wroclaw Boy:
So does it mean Polish property has performed so badly? Actually the reality is probably that it has performed a little too well compared to neighbouring countries.

Thing is about these guys is that they are looking from the perspective of the investor. The bottom,top and middle line is profit; fair enough that's their turf and that's their game, but as a far as the majority of Poles are concerned what he and Co. see as bad the rest see as good.


sa11y Threads: 6
Posts: 372
Joined: Dec 12, 2011
  ♀ Feb 16, 2012, 12:45pm  #

milky:
So in Poland paying 10 times your salary for a one bedroom flat, or 15 times your yearly salary for a house

Milky - but that's not what people are paying. You can't take the cost of flat in central Warsaw and compare it to buying power of a supermarket lady.
So let's look at example.
You said that generally as a couple you will be able to get a loan 3 x your combined annual salary.
Looking at Warsaw:
1) 1 bedroom flat in one of the "sleeper" areas (i.e. Bialoleka - still in Warsaw, good transport to the centre): approx 280 000 PLN
2) Average salary in Warsaw: ~5000 PLN (3500 PLN/nett)
- combined income: net 7000 *12 = 84000 PLN/pa
- 280000/84000= 3.33
- So in Warsaw, if you earn the average, you need to work just over 3 years to buy a flat (definitely 10-15 years!)

Looking at London:
1) 1 bedroom flat - East London: 180000 GBP (small flat, full ownership) - this will probably be bigger than the mentioned flat in Warsaw, so let's take 75% of that = 135000 GBP
2) Average salary in London: ~33000 PBP pa (21000 net)
- combined income: net 42000 GBP/pa
- 135000/42000 = 3.21
- So in East London if you earn average salary for London, you also need to work for just over 3 years (in fact as there is not enough small property, you would need to work more than that - perhaps that's why they came with idea of shared ownership)

Johannesburg (Edenvale - where I live)
1) 1-bedroom flat: 700000 ZAR - difficult to come by, properties are big here...
2) Average salary in Johannesburg: ~240000 ZAR/pa (155000 net)
- combined income: net 310000 ZAR/pa
- 700000/310000 = 2.25
- So in Johannesburg you need to work just over 2 years to afford a small flat. And even South Africa has recently been accused of having property bubble because property prices doubled in 5 years.

South Africa - low cost housing, targeted at lowest income group (they will probably make 100000 ZAR/year of combined income. You can buy a "match-box" house for 200000-300000 ZAR - so even in case of the lowest earning population the ratio of paying ~ 3 x combined annual income works.

My calculation has limitations - I took that the household income is a double of individual averages that is a generalization in the first place. But the bottom line is - that if there is a gap in the market, it eventually will get filled.
Poland has problem with low cost housing (not enough). So the assumption is that while the new properties will be probably in the same range as property in the rest of Europe, the old, small post communist establishments will lose value.
The economic situation in Poland changed since it joined EU and property price increases are linked to that rather than the bubble.


peterweg Threads: 52
Posts: 2,938
Joined: Feb 16, 2007
  ♂ Edited by: peterweg  Feb 21, 2012, 03:19pm  #

Harry:
a) Source for the claimed fall being between 11.5% and 17.5%? Or do you not bother with sources?
b) Given that inflation in Poland since 2008 has varied between 2% and 5%, perhaps you could present a calculation showing how that interest rate causes a fall of 11.5% to become a fall of 24.7% in just three years? How does an interest rate averaging about 3% cause a fall to more than double?

Looking forward to your reply....

Using these figures
milky:
2009: 0%
2010: -3%
2011: -5%
2012: -4% to -10% (predicted)

Compounded falls to date

2009: 100
2010: (100 *0.97)=97 = -3%
2011: (97*.95)= 92.15 = -7.85%
2012: (92.12*.96) = 88.464 = -11.536%. (For a estimated fall of 10% its 82.935 = -17.065% -opps my mistake)

This is the source of the real fall of 11.5% to 17.1% fall from 2009 to end 2012


Adding inflation, assuming 4% average as I did..

2009: 100
2010: (100 *0.97)=(97 *0.96)=93.2 = -6.88%
2011: (93.2*.95)= (92.15*0.96) =84.92544= -15.07456%
2012: (84.925 *.96) = (88.464*0.96)=78.2672855=-21.7327145 %
(For a estimated fall of 10% its (82.925 *0.9) = 73.37558016= -26.62441984%

However, Inflation is variable, so here it is with approx inflation numbers from here http://www.tradingeconomics.com/poland/inflation-cpi

2009: 100
2010: (100 *0.97 *0.965)=93.605 = -6.395%
2011: (93.6 *.95 *0.9725) =86.47931938= -13.52068063%
2012: (86.479 *.96 *0.958)=79.53330044=-20.46669956 %
(For a estimated fall of 10% its (86.4795 *0.9* 0.958) = 74.56246917= -25.43753083%

So a more accurate statement. Real fall of 11.536% (for a fall of 4% in 2012) and 17.065% for a fall of 10% in 2012

Inflation adjusted (inflation assumed 4.2% in 2012), this equates to a fall of between 20.5 % (assuming 4% fall in 2012) and 25.4% (assuming 4% fall in 2012) from 2009 til the end of 2012


peterweg Threads: 52
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Joined: Feb 16, 2007
  ♂ Feb 21, 2012, 06:45pm  #

Inflation adjusted (inflation assumed 4.2% in 2012), this equates to a fall of between 20.5 % (assuming 4% fall in 2012) and 25.4% (assuming 10% fall in 2012) from 2009 til the end of 2012.

Corrected.


Harry Threads: 100
Posts: 13,640
Joined: May 2, 2007
  ♂ Edited by: Harry  Feb 21, 2012, 07:11pm  #

peterweg:
Inflation adjusted (inflation assumed 4.2% in 2012), this equates to a fall of between 20.5 % (assuming 4% fall in 2012) and 25.4% (assuming 10% fall in 2012) from 2009 til the end of 2012.

Nice try.

However, your original post here was:
PeterWeg03:
The fall in absolute numbers has been 11.5-17.5% so far. With inflation the fall has been to 24.7% to 29%.

Has been so far, i.e. has already happened, so you need to base your calculations from 2008 to 2011. Given that you made your statement on 24 Jan 2012, you cannot factor in assumed falls in 2012 into a statement about what has happened so far.

Why might you want to factor in 2012 projections? Well, the numbers which milky gave and which you work from (given here) show
milky:
2008: +5%
2009: 0%
2010: -3%
2011: -5%

And you were challenged by me here:
Harry:
b) Given that inflation in Poland since 2008 has varied between 2% and 5%, perhaps you could present a calculation showing how that interest rate causes a fall of 11.5% to become a fall of 24.7% in just three years?


So, let's do your calculation again using those figures:
2008: +5%
2009: 0%
2010: -3%
2011: -5%

Compounded falls to date
2008: 105
2009: (100 * 1.00) = 105
2010: (105 *0.97)= 101.85 = +1.85%
2011: (101.85*.95)= 96.7575 = -3.2425%

So the real fall over those three years is -3.2425%

I’ll let you add in inflation to those figures, am sure that you can get it to the 24.7% to 29% you’re claiming have happened so far.


peterweg Threads: 52
Posts: 2,938
Joined: Feb 16, 2007
  ♂ Edited by: peterweg  Feb 21, 2012, 07:33pm  #

Harry:

So the real fall over those three years is -3.2425%


Useless.

Thats four years.

We were discussing falls from peak. Why would you include a year before the peak? its simply irrelevant and idiotic, quite frankly.

You also ignored inflation.

If you want hard numbers, -13.5% fall from peak at the end of 2011 is undeniable.


Harry Threads: 100
Posts: 13,640
Joined: May 2, 2007
  ♂ Feb 21, 2012, 08:01pm  #

peterweg:
We were discussing falls from peak. Why would you include a year before the peak? its simply irrelevant and idiotic, quite frankly.

The original statement was "since 2008". But let me humour you, let's go from 2009 and for three years. Again let's use the figures which you want to use (i.e. the ones linked to in my post above):

2009: 0%
2010: -3%
2011: -5%

So the compounded fall would be:
2009: (100 * 1.00) = 100
2010: (100 *0.97)= 97 = -3%
2011: (97*.95)= 92.15 = -7.85%

peterweg:
If you want hard numbers, -13.5% fall from peak at the end of 2011 is undeniable.

Er, your figures show that it is actually 7.85% without inflation.

peterweg:
You also ignored inflation.

I actually said "I’ll let you add in inflation to those figures".

But we can just use the figures you have already given above:
2009: 100
2010: (100 *0.97 *0.965)=93.605 = -6.395%
2011: (93.6 *.95 *0.9725) =86.47931938= -13.52068063%

Hmm, so not even the figures which you yourself put forward support your claim that "The fall in absolute numbers has been 11.5-17.5% so far. With inflation the fall has been to 24.7% to 29%." In reality the fall has been 7.85% in absolute numbers and 13.52068063% with inflation, a fact which you have been nice enough to show in your post.

When even one's own calculations disagree with one's past statements, it is usually a good idea to correct one's statements, wouldn't you say?


peterweg Threads: 52
Posts: 2,938
Joined: Feb 16, 2007
  ♂ Edited by: peterweg  Feb 21, 2012, 08:25pm  #

I showed the the figures I used to perform the calculation, thats what you asked for. I modified them to take into account real inflation.

peterweg:
Er, your figures show that it is actually 7.85% without inflation.


And 13.5% with

If you want to dispute those figures or change the basis, fine but don't be complain that the results are different when you do so.

I shouldn't have said 'so far' when including the 2012 estimate, that was wrong on my part. I guess inflation could be below 4% and prices could rise this year. NBP estimates 3.25% for 2012.


milky Threads: 20
Posts: 1,802
Joined: Oct 26, 2009
  ♀ Feb 21, 2012, 09:07pm  #

So any results for January sales?
I read yesterday that there are over 50.000 unsold apartments in the main 6 cities.
Also banks refusing mortgages unless couples have a joint income of 8000 zloty, net a month.


Harry Threads: 100
Posts: 13,640
Joined: May 2, 2007
  ♂ Feb 21, 2012, 09:16pm  #

milky:
I read yesterday that there are over 50.000 unsold apartments in the main 6 cities.
Also banks refusing mortgages unless couples have a joint income of 8000 zloty, net a month.

As usual, source or it didn't happen.


peterweg Threads: 52
Posts: 2,938
Joined: Feb 16, 2007
  ♂ Feb 21, 2012, 09:50pm  #

More importantly..

Wages in Poland's private sector grow 8.1 percent

20th February 2012

The average wage in Poland’s private sector rose by 8.1 percent year-on-year in January, well above market forecasts of 4.9 percent, and significantly more than in December, when wages grew 4.4 percent, according to the Central Statistical Office.

“It is difficult to explain what the source of such a substantial acceleration of wages was without detailed data, but in our view this may be due to payment of bonuses or wage rises in a big company and (only partially) to [a] hike of [the minimum] wage, which jumped from zł.1,386 to zł.1,500 in January,” Bank Zachodni WBK analysts wrote in a market report.

Employment growth in the private sector slowed to 0.9 percent year-on-year in January, from over 2 percent y/y a month earlier. In January 2011, the figure stood at 3.8 percent y/y, showing that there has been a substantial slowdown in the Polish labor market, according to BZ WBK.

http://www.wbj.pl/article-58115-wages-in-polands-private-sector-grow-8 1-percent.html


BRS Threads: 3
Posts: 51
Joined: Aug 16, 2011
  ♂ Feb 23, 2012, 08:41am  #

28 m2 doesn't sound so bad compared to 78 sq ft in New York

http://ca.shine.yahoo.com/manhattan-s-newest--smallest-apartment---arc hitect-lives-in-78-square-foot-abode.html


milky Threads: 20
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Joined: Oct 26, 2009
  ♀ Feb 23, 2012, 09:02am  #

This is just one guy of about 20 years of age. Paying 750 $ when the average wage in New York is 935$; not so bad for a classy place like NY.

BRS:
28 m2 doesn't sound so bad compared to 78 sq ft in New York


In Poland(in sh1tholes cities) there are large families of 4 and 5 living in 50 m apartments. That is bad.


Avalon Threads: 3
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Joined: Sep 11, 2007
  ♂ Feb 23, 2012, 09:24am  #

milky:

In Poland(in sh1tholes cities) there are large families of 4 and 5 living in 50 m apartments. That is bad.


And if you took away their mobile phones, 40" televisions, cable subscriptions and cars, it would be a lot worse.


pip Threads: 20
Posts: 1,964
Joined: Jul 4, 2011
  ♀ Feb 23, 2012, 09:51am  #

milky:
In Poland(in sh1tholes cities) there are large families of 4 and 5 living in 50 m apartments. That is bad.


Poland doesn't have the same issues with space as the western world. This is not outrageous to live in an apartment of 50m with two kids a dog and the mother in law.

In fact, I have a friend who grew up in the blocks in Warsaw Ochota in a two room apartment with a kitchen. the family all slept in one 20 m2 room and the babcia slept in the other. That is 5 people in less than 50 m2 space.
Even now that he makes good money he bought an apartment- during the peak so he over paid grossly, in Mokotow, Warsaw- in a low rise block and the place is only about 65 m2--two kids.
I couldn't live like that but many people can.


Harry Threads: 100
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Joined: May 2, 2007
  ♂ Feb 23, 2012, 10:26am  #

milky:
large families of 4

Four people is a large family? A strange statement even by your standards.

milky:
I read yesterday that there are over 50.000 unsold apartments in the main 6 cities.
Also banks refusing mortgages unless couples have a joint income of 8000 zloty, net a month.

For the second time as asking: source please. Or should we just conclude that you're making things up?


sa11y Threads: 6
Posts: 372
Joined: Dec 12, 2011
  ♀ Feb 23, 2012, 12:26pm  #

milky:
Paying 750 $ when the average wage in New York is 935$; not so bad for a classy place like NY

7 sq m is not bad (for 750 USD!) is not bad?
And 50 sq m for a family of 4 IS bad?


f stop Threads: 46
Posts: 3,786
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 Photos: 1  ♀ Feb 23, 2012, 03:56pm  #

milky:
average wage in New York is 935$

that's per week


BRS Threads: 3
Posts: 51
Joined: Aug 16, 2011
  ♂ Feb 28, 2012, 02:31pm  #

Warsaw stats and comparison - article extracts below:

Global housing market downturn gathering pace
Tuesday 28 February 2012
The world’s housing downturn is gathering momentum, according to the latest world-wide survey of house price indices prepared by the Global Property Guide. During 2011, house prices fell in 22 countries, of the 35 countries for which Q4 house price statistics are available, and rose in only 13 countries. Similarly, 21 housing markets performed worse during 2011 than last year, while only 14 countries performed better.
The figures for the 4th quarter of 2011 are somewhat worrying, with quarterly price rises in only 10 countries, but price falls in 25 countries. On the other hand, the apparent trend towards recovery in the US is positive.

The Global Property Guide’s statistical presentation uses price-changes after inflation, giving a more realistic picture than the more upbeat nominal figures usually preferred by real estate agents.

European housing markets still heading down
Most countries whose housing markets experienced accelerated downturns in 2011 are located in Europe, including Finland (-2.22% down in 2011), United Kingdom (-3.39%), Sweden (-5.29%), Netherlands (-5.77%), Slovak Republic (-6.88%), Portugal (-7.78%), Spain (-9.27%), Athens, Greece (-10.43%), and Warsaw, Poland (-10.55%).
Unhappy Ireland still holds the title of ‘world’s weakest housing market’, with house prices plummeting by 18.08% in 2011. With low transactions, constrained mortgage lending, and an uncertain economic environment, Irish house prices are likely to continue falling in 2012.

However, several European countries actually enjoyed house price rises in 2011. The highest house price climb in Europe was in Tallinn, Estonia, whose property market has been recovering since the second half of 2010. Over the past twelve months, house prices in Tallinn rose 8.36%.

Housing markets in the Ukraine and Iceland finally bounced back in the final quarter of 2011. In Kiev, apartment prices climbed by 5.29% (in nominal terms) from a year earlier, after falling 9.47% the previous year. Likewise, house prices in Iceland rose 1.84% year-on-year, after falling 4.18% the previous year.


pip Threads: 20
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  ♀ Feb 28, 2012, 03:02pm  #

Canada hasn't been hit hard- which is interesting because of our geographical location.

http://business.financialpost.com/2012/02/21/canada-housing-prices-won t-crash-poll/

One of my best friends husband just sold a house in 4 days- he is over the moon.


milky Threads: 20
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Joined: Oct 26, 2009
  ♀ Feb 28, 2012, 03:58pm  #

BRS:
(-5.29%), Netherlands (-5.77%), Slovak Republic (-6.88%), Portugal (-7.78%), Spain (-9.27%), Athens, Greece (-10.43%), and Warsaw, Poland (-10.55%).
Unhappy Ireland still holds the title of ‘world’s weakest housing market’, with house prices plummeting by 18.08% in 2011. With low transactions, constrained mortgage lending, and an uncertain economic environment, Irish house prices are likely to continue falling in 2012.

Why countries and then capitals of two cities....Why not one or the other


BRS Threads: 3
Posts: 51
Joined: Aug 16, 2011
  ♂ Feb 28, 2012, 10:02pm  #

good question, I went to the source and it seems what they quoted for Warsaw is actually for Poland, by city info below. I'd recommend checking the website for the full article (not that you can trust any data anywhere - I doubt the country data they use is even comparable) - http://www.globalpropertyguide.com/Europe/Poland/Price-History

Yet Poland’s housing market was Europe’s second-worst performer in 2011, down by 10.55% in inflation-adjusted terms.
Prices fell less in major cities, but the downturn is significant:
• In Warsaw, the average price of "exposed units" (i.e. used units) fell 6.6% in 2011 (6.97% in real terms), according to REAS.
• Krakow used dwelling prices fell 5.53% (5.90% in real terms).
• Poznan used dwelling prices fell 4.57% (4.95% in real terms).
• Lodtz used dwelling prices fell 5.46% (5.83% in real terms).
• Tri-City used dwelling prices fell 3.44% (3.82% in real terms).
• Wroclaw used dwelling prices fell 8.39% (8.75% in real terms).
Compared to pre-crisis peaks:
• House prices in Warsaw are down by 13.63% (13.53% in real terms).
• In Krakow, house prices are down by 11.80% (13.2% in real terms).
• In Lodz, prices have fallen by 17.87.% (17.67% in real terms).
• In Tri-City, house prices plunged by 25.22% (26.62% in real terms).
• In Wroclaw, house prices are down by 31.91% (31.81% in real terms).
• In Poznan, property prices plummeted by 44.08% (44.18% in real terms).


delphiandomine Threads: 60
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  ♂ :-( Edited by: delphiandomine  Feb 28, 2012, 10:18pm  #

BRS:
• In Poznan, property prices plummeted by 44.08% (44.18% in real terms).


That's absolutely bollocks, to say the least.

If they had fallen 44%, I'd be straight to the bank to ask for another mortgage as the prices would be laughably low given that the average wage here is now well over 4000zl/month.

Prices have fallen in Poznan by around 10% or so since the peak. Entirely expected, and given the continued sharp climb in wages, nothing out of the ordinary.


BRS Threads: 3
Posts: 51
Joined: Aug 16, 2011
  ♂ Feb 29, 2012, 09:40am  #

delphiandomine:
That's absolutely bollocks


Like I said - you can't trust any data anywhere - at best it is not comparable apartments (ie. more lower standard/smaller apartments are being sold).

Some more data from the news today for those who like data

Apartments losing value
Not all real estate markets in Europe have bounced back from the financial crisis - and
the Polish one belongs to them. Apartments have become cheaper since the 2007
housing bubble. Taking into account inflation, average value has fallen by a quarter,
according to professor Michael Ball from Reading University in Great Britain.
According to his newest report, "2012 RICS European Housing Review," it appears in
Ireland prices have fallen by more than 50% and in Great Britain and Hungary, by
more than 30%.



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