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Thursday, 9th February 2012
Home > Polish Property and Real Estate Articles > Polish Property Report - Winter 2009/2010
Polish Property Report - Winter 2009/2010Article added on: 2010-01-03 |
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As the dust starts to settle on the Credit Crisis its effects on Central European property markets have become ever clearer. While Bulgaria, Romania and the Baltic States have all suffered heavily it is Poland that has escaped unscathed ... almost. There are two main reasons for this, it is not just lady luck. The first is that the permit system put in place to stop foreigners buying more than one piece of real estate helped control the market in the boom times. The second is that Poland's economy was built on strong foundations. The permit system was cursed so often by foreign buyers. If you were a non-Polish national you could buy one flat or one house and that was it. As prices went on rising some broke this law and they still risk having their portfolio confiscated but most went by the book. The effects of the permit are now a relief to many because it meant the local market was not priced out as became the case in other CE states where foreigners bought entire blocks and even villages in the race to cash in. The second crucial factor that saved Polish real estate was that the economy was not built on one area alone. As the Irish and the Latvians have admitted, they became too reliant on real estate and construction and when this started to tremble it shook the entire economy. This point has been noted by Ed Parker of Fitch Ratings in a BBC interview where he said, "one of the problems was that a lot of this foreign capital was directed to real estate development and mortgages rather than building an export oriented manufacturing base". "[This was] in contrast to countries like Poland, where a lot of [foreign direct investment] FDI was used to set up manufacturing plants. A lot of the development [in Latvia] went into the real estate sector." Looking forward another new and welcome development are more reliable price statistics for the Polish market. The finance portal money.pl has got most of the major portals together to provide much more comprehensive pricing data and the results are shown below:
What's most promising is the consistancy across all the major cities and it paints a solid picture that while other countries may struggle for many years to come, Poland's real estate market is ready to move on. But there is one final caveat. There have, and still are, some distressed sales. These are predominantly from developers that oversold to foreign buyers who could not then raise the mortgages to complete their purchase. They are still to be found with banners now asking potential Polish buyers to 'propose a price'. |
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