Comments on: Polish real estate market

By: Mark Biernat

Mark Biernat — Tue, 17 Jan 2012 23:27:08 +0000

Poland is way over valued. I think 50% is conservative. I live in Florida now and can buy a new home on the beach with high standard, like 150 meters for the price of 20 meters in Krakow, actually cheaper. So it is crazy to buy anything in Poland.

By: Ann

Ann — Mon, 16 Jan 2012 12:48:16 +0000

Polish real estate market is a huge bubble! And as every bubble it will definitely burst, around 30-50%. History likes to repeat. Take a look at bubbles in Japan, US, UK, Ireland. Poland always reacts with delay comparing to the economic situation in the world.

By: Mark Biernat

Mark Biernat — Fri, 13 Aug 2010 06:24:00 +0000

Poland is dangerous in terms of real estate. I am an American and lived here a good part of my life. I am also an investor and I do not care what people do with their money, but there is no way, I would touch this market. There was a book that studies returns on investments called ‘Irrational Exuberance’ it talks about how expectation of returns get out of line with reality in markets like real estate. This is the Polish market. It is has such an over supply that nothing seems to be able to stimulate it.
On the insider real estate people have admitted to me, they would not touch Polish property except if you want to lose money, even though they are trying to still sell.

By: Mark Biernat

Mark Biernat — Fri, 13 Aug 2010 06:18:24 +0000

Mike you are a wise guy and know real estate. The credit market is a mess. I know I was in the investment business for years. The real estate market in Krakow and all of Poland will take maybe ten years or more to recover at this point. I thought sooner but I would not touch any invest property in Poland until the far future. People got greedy and there is not reason for you to pay for their mistakes with your hard earned money. I will build outside the city where the cost is a fraction. Polish roads and rail are being upgraded with EU money and there is an mass exodus to the suburbs like what happened in the USA.
For example, Hartford, CT when from the richest to the second poorest city in the USA in terms of poverty level once I-84 and I-91 went in to carry people to and from the city from the suburbs.

By: SB

SB — Thu, 12 Aug 2010 08:22:27 +0000

There are clearly 2 types of flats in Warsaw – the old and the new.

Generally I would not want to live in the old, and I am sure there are many that want to leave ‘the old’. It’s difficult to generalize on prices in Poland.

I’ll admit that the prices are high – but worse case scenerio, the value of the property falls, it means you will be able to buy a similar flat for the same reduced value.

Trying to time the market is tough – back home prices stayed flat for 20 years and then close to tripled in the next 10 years.

The market is cyclical, and always will be.

If you want to maximize your return, buy back in 2003. Since you can’t do that, just rent if it makes you happy. It is cheaper than buying (on higher end properties at least).

In terms of buying for speculative purposes, Poland seems like a dangerous place to do this currently.

By: mike

mike — Wed, 11 Aug 2010 16:55:48 +0000

Interesting post, the exact same thing happened in Ireland….developers, bankers & investors skewed the market for years. Now property in ireland has halved from 2007 and has more to go… I’ll be in Krakow soon working but I wouldn’t touch property with a barge pole…looking at what the local average salary is to what investors are looking for flats is ridiculous….banks are giving out 45 year mortgages I hear…toxic stuff

By: Mark Biernat

Mark Biernat — Sat, 08 May 2010 04:06:58 +0000

It is not the owners as much as the real estate agencies. The owners wanted a 100% profit in a few years, but now their expectations have adjusted downward. It is the developers, many who are not Polish, who are working with Krakow real estate agents and Warsaw real estate people that really try to keep the price in an artificial bubble. I have seen this in the USA a number of times. The market eventually collapses. I would not touch new developments at this point as these are the ones that are the most inflated. New flats coming on the Polish market are the one people try to get the most profit.
Owners just want what they paid.
But either way I do not care. As a potential real estate buyer, I do not care what the other guy paid for his house. Just like if I were in the stock market do you care if the guy you buy the stock from made a profit? Its all about supply and demand. Thanks for the comment.
I think the market will continue to fall back to the levels were the average Polish person can buy. If Poles make 2500 pln a month this should be the price per meter. Even that is a lot of money. I have seen markets in the USA go to 800 pln per meter and less.

By: renato

renato — Thu, 06 May 2010 16:42:46 +0000

I am Renato from Italia , i sold my flat in Krakow last year , i sold it 25% cheaper from what I paid 4 years before . and it took 1,5 year for find somebody for purchase it. It was very hard to sell it , but good , I am out this no resell market. no buyer , and the few have lot of problem for have a loan….
foreigners are not interesting to buy in Krakow now , and it is too far much expensive for polish people .
the Polish owners needs times for understand they will not have the fortune they expect to have for their flat.
some flat are more than 2 years on the resell market , and owner dropped just a little the price , if they don’t make a huge drop , thy will never sell.

some real estate agency in Kraków closed , because no deal….

Polish owner still live in dream , but soon they will wake up , and understand they cannot be rich just in selling one flat ….

By: Mark Biernat

Mark Biernat — Fri, 23 Apr 2010 17:56:00 +0000

Sometimes real estate down cycles last 10 or 15 years. The stock market is much less ridged than the real estate market and from 1999 to 2010 there was a loss not a gain in from 1967 to 1982 there was a loss in the US equity market.

People’s memories are short and they think it always goes up. Wrong. Markets will go up when there is a reason to go up. This is always connected to supply and demand. Right now I see many flats coming on the market and the population of Krakow decreasing as more people are moving to the suburbs. This means downward pressure on the market will continue until something radical happens. With 13 % unemployment I do not see the market moving.
I live in Krakow and I see nothing moving. Empty buildings. I certainly will not buy these over priced flats.

By: Oscar

Oscar — Wed, 21 Apr 2010 09:00:49 +0000

Interesting take but… Its 0.2010 and nothing much has changed (perhaps 5-10% max in certain areas). I am interested in what is your take on that now – since in 2008 you wrote that you would be buying 1.5 years from that time (which is now). Do you think your predictions were wrong? Thanks ! Oscar