Residential real estate values go down in Poland, September 2011

JonnyMThreads: 16 Posts: 4,487 Joined: Mar 9, 11 ♂	Jan 21, 12, 13:15 #421
Avalon: That is really funny, you should read the previous posts by Milky He accused me of being a property developer. Hah!

AvalonThreads: 3 Posts: 814 Joined: Sep 11, 07 ♂	Jan 21, 12, 15:11 #422
JonnyM: He accused me of being a property developer. Hah! He denegrates the very people he expects to provide him with somewhere to live. I imagine that he thinks doctors are doing him a favour when they treat him.

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Jan 21, 12, 19:35 #423

hythorn:

Nowadays it is going to destroy the planet in super quick time

That's for sure;basically the id is king.

hythorn:

The psyche of the Poles and the East Germans is completely different.

It's the same in Ireland,after centuries of imperialist domination everyone wants to own their own bit of turf; It's understandable, but! easily exploited by gombeen men.
as for the Chinese
http://www.youtube.com/watch?v=w11nywVY9Vc

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Jan 21, 12, 20:44 #424

This thread is rapidly descending into nonsense but to go back to avalons challenge about affordability. I have no idea where his 45 k figure comes from but maths obviously not a strong suit, nor economics by the look of it.

Average wage is 3000, multiply by 12 and it's 36k. Use an earnings multiple of 3x and it is 108 k. Add a 20 percent deposit and you get to about 130 k.

And that should be about the range that family accomodation starts in smaller towns. In bigger towns add a premium for higher wages and it would be circa pln 170 k in say gdansk and about pln 200 k in Warsaw. That also corresponds with the rent to buy equation I described earlier.

I think developers could make profits at those levels because they were doing so in 2004. Inflation has not been extreme since then but it is clear that developers margins were often 40 percent or more during the boom years. Whenever I meet one they stil normally like to pitch up in an ugly black jeep wearing massive belt buckles so they are probably still getting some margin.

But heaven forbid some of them will have to make a loss on some of their existing stock.

Not sure why the government should offer tax breaks to support the market, other sectors of the economy have to pay full price for their lunch. What the government should do is help the admin process and make it quicker to get permits - that would be win win for residents and developers.

milkyThreads: 10 Posts: 1,229 Joined: Oct 26, 09 ♀	Jan 21, 12, 21:06 #425
cms: This thread is rapidly descending into nonsense I agree, I'll ignore the slander from now on. cms: Average wage is 3000, multiply by 12 and it's 36k. Use an earnings multiple of 3x and it is 108 k. Add a 20 percent deposit and you get to about 130 k. yes, the above is logical and true.

teflcatThreads: 6 Posts: 1,076 Joined: May 29, 11 ♂	Jan 21, 12, 21:17 #426
milky: easily exploited by gombeen men Take note Harry and Delph. No American, not even an Irish-American under sixty years of age, would use this expression. Let's put the lid on this Mark B. crap once an for all.

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Jan 21, 12, 22:52 #427

cms:

I have no idea where his 45 k figure comes from but maths obviously not a strong suit, nor economics by the look of it.

I must apologise for getting the calculation wrong, I was in a hurry and talking to someone at the same time.
Even so, you are not very clever yourself, you assume that the 3000 PLN per month is saved, what about living costs, rent, food etc. We did cite this as a single, average wage.

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Jan 21, 12, 23:46 #428

cms:

Average wage is 3000, multiply by 12 and it's 36k. Use an earnings multiple of 3x and it is 108 k. Add a 20 percent deposit and you get to about 130 k.

And that should be about the range that family accomodation starts in smaller towns.

Which it does, I know that for a fact with connection to Slupsk.

However you overlook the fact that it is unusual for a Polish family to have only one wage earner. So to take your calculation, the earnings would be 72,000 per year and the multiple 216,000, with a 20% deposit that is about 260,000. Reckon that is enough to buy family accommodation in the average Polish city?

As to kids, I'd like to have a yacht and a Citroen DS; however I can not afford them (unless I sold my flat and rented). Children are no different: if people can't wait until they are in a financial position to have kids, they have no right to whine about not being able to buy a flat.

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Edited by: Moderator Jan 22, 12, 01:29 #429

However you overlook the fact that it is unusual for a Polish family to have only one wage earner. So to take your calculation, the earnings would be 72,000 per year and the multiple 216,000, with a 20% deposit that is about 260,000. Reckon that is enough to buy family accommodation in the average Polish city?

More than enough. Most Polish people don't live in big cities, and right now, 260k will buy you a lot.

260k is certainly more than enough for a 3 bedroomed flat of 80-90sqm in a commuter town for Poznan. A 45 minute commute is hardly the end of the world, and work isn't concentrated in the centre of Poznan too. For example - let's take a couple who work for Allegro. It's located near the airport, and with the opening of the dual carriageway past Lawica, living in a small town about 20km away isn't a big deal. With 6000k a month in their pocket, it's perfectly possible for a young couple to do well in such areas.

Harry:

Children are no different: if people can't wait until they are in a financial position to have kids, they have no right to whine about not being able to buy a flat.

This is one of the real problems - very often, women are studying something useless for 5 years, getting a worthless bit of paper - and then getting that first job. They get the "umowa o prace" - and suddenly fall pregnant. Their career is finished, because no employer will trust them again - and they stagnate, if they even go back to work.

Quote and personal remark removed

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Jan 22, 12, 09:03 #430

As I pointed out before, rather the opposite is true. It is unusual for a polish household to have 2 full Time wage earners. Given that they make up only 23 percent of the population.

And to answer avalon I have showed the typical budget including all costs for a family and the resulting amount they could afford for a mortgage

Banks always look at the major wage earners salary and security of employment. Starting to base that on 2 wage earners is suicidal as the chance of both being stable over the period of a 20 year loan are very low.

I still think the current prices are way overdone. People do not want to live in small towns yet and the commutes door to door are actually far longer than the 45 minutes you talk about.

As for having kids well someone has too, otherwise there is nothing quite look a population decline to reduce house prices long term ! Look at east Germany which people here some are fond of referencing.

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Jan 22, 12, 09:54 #431

cms:

Starting to base that on 2 wage earners is suicidal as the chance of both being stable over the period of a 20 year loan are very low.

yes, I have already stated this to the lads, but they seem to ignore.

cms:

As for having kids well someone has too, otherwise there is nothing quite look a population decline to reduce house prices long term !

There is a major population decline in process. Especially in Poland B.

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Jan 22, 12, 11:10 #432

Harry:

However you overlook the fact that it is unusual for a Polish family to have only one wage earner. So to take your calculation, the earnings would be 72,000 per year and the multiple 216,000, with a 20% deposit that is about 260,000. Reckon that is enough to buy family accommodation in the average Polish city?

Even so Harry, If you are renting, look how long it would take to save a deposit. If you are looking at a central location in a city, the most you will get with that sum would be something old and crappy, certainly not new unless it is 23-33m2 studio flat.
I understand that people would have to buy what they could afford but there are some real problems out there at the moment, mainly with lending and social housing. Goverment interference is gooing to be needed in the near future.

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Jan 23, 12, 10:31 #433

Avalon:

I understand that people would have to buy what they could afford but there are some real problems out there at the moment, mainly with lending and social housing. Goverment interference is gooing to be needed in the near future.

Why should the government intervene ? You accuse Milky of being socialist (maybe he is) but then say the government should step in to help one sector of the economy. How is that different to bailing out the banks ?

And what can the government do ?

Allow banks to relax lending criteria or the 20% deposit requirement ? That would be extremely risky and is precisely what started the problems in US, Spain, Ireland etc

Decrease interest rates ? Unlikely when they have lots of bonds they need to sell to cover their deficits and would also damage the zloty.

Housing grants ? Because of the deficit the government needs to cut spending, not increase it and in any case there is fairly credible evidence that the rodzina na swoim cash found its way straight on to developers bottom lines.

The only intervention they should make is to reduce bureaucracy, make permits and zoning easier and reduce transaction taxes if they can afford to do so. I guess they could make a straightforward ban on foreign currency lending but the banks have more or less imposed that anyway.

I think the government probably also wants the housing bubble to deflate slowly so that Poles are able to divert more of their income into other sectors.

AvalonThreads: 3 Posts: 814 Joined: Sep 11, 07 ♂	Jan 23, 12, 10:46 #434
cms: The only intervention they should make is to reduce bureaucracy, make permits and zoning easier and reduce transaction taxes if they can afford to do so. I guess they could make a straightforward ban on foreign currency lending but the banks have more or less imposed that anyway. I agree. Also get rid of VAT on new build, this would stimulate the industry and create more jobs.

cmsThreads: 6 Posts: 201 Joined: Sep 4, 09 ♂	Jan 23, 12, 11:15 #435
Why cut VAT - I would love to be able to cut prices to my customers by 23% but I'm not able to and I just accept that as part of doing business here. Why should developers get special treatment ? How many jobs would be created by that and what would be the hit on the governments finances ?

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Jan 23, 12, 12:43 #436

Avalon:

I agree. Also get rid of VAT on new build, this would stimulate the industry and create more jobs.

Why should the real estate industry be singled out for special treatment, it is not like the investors behind Real estate development companies need a leg up, developers have had good times, they should have saved their profits for the bad times. like any normal business. Cut the profit margin and operate like any normal business does, in my opinion the government needs to raise the standards of developers and real estate agents to protect home buyers. The sh1t that some developers get away with in Poland is beyond criminal.

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Jan 23, 12, 13:00 #437

Wedle:

Why should the real estate industry be singled out for special treatment, it is not like the investors behind Real estate development companies need a leg up, developers have had good times, they should have saved their profits for the bad times. like any normal business. Cut the profit margin and operate like any normal business does, in my opinion the government needs to raise the standards of developers and real estate agents to protect home buyers. The sh1t that some developers get away with in Poland is beyond criminal.

What are you waffaling on about now?. I am not aware of any developers asking for special treatment. I think you will find that they have also lowered their costs and lowered their profit margins. Criminality occurs in all walks of life, even in governments.

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Jan 23, 12, 14:22 #438

Avalon:

I am not aware of any developers asking for special treatment. I think you will find that they have also lowered their costs and lowered their profit margins

You do what you have to to survive and put the Bentley on hold.

Avalon:

I agree. Also get rid of VAT on new build, this would stimulate the industry and create more jobs.

As I mentioned

Wedle:

Why should the real estate industry be singled out for special treatment, it is not like the investors behind Real estate development companies need a leg up, developers have had good times, they should have saved their profits for the bad times. like any normal business.

There are plenty of developers in Poland running round today trying to tell anyone that will listen that they have fallen on hard times,some developers can discount house prices from 2.5 Million PLN to 1.5 Million PLN to sell, it makes one wonder just what margins they operate on. I have absolutely no sympathy for Polish developers or Real estate agents during the current economic downturn, they have got to do the same as all other business owners, " adapt to the current times".

PeterWeg03

Jan 23, 12, 15:51 #439

Avalon:

He denegrates the very people he expects to provide him with somewhere to live. I imagine that he thinks doctors are doing him a favour when they treat him.

Got an elevated opinion of yourself don't you? Just about anyone can build themselves a place to live if they had to. Developers simply offer the service at considerable cost. You could shoot every builder in the world and they could be replaced immediately.

AvalonThreads: 3 Posts: 814 Joined: Sep 11, 07 ♂	Jan 23, 12, 17:40 #440
PeterWeg03: Got an elevated opinion of yourself don't you? Yes, especially when it comes to you.

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