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Accommodation in Poland is getting cheaper

Accommodation in Poland is getting cheaper
Accommodation in Poland is getting cheaper

Construction boom in Poland comes to naught. Prices per square meter in Polish cities are rapidly getting down. At the same time experts predict that housing prices in Poland have not yet reached its bottom and will soon be lower by 500-1000 zloty per square meter.

The fall in prices for residential real estate market in Poland is caused by at least two objective factors: revaluation of lands, which were bought by the developers at the peak of the boom in 2007 and declining in purchasing power of the Polish population at the background of a financial crisis.

Polish edition "Dziennik Gazeta Pravna" brings some most striking examples that characterize current situation in the Polish real estate market. Thus, the main conclusion that journalists made in the article is that decline in prices is due to the large number of land offers at reduced prices. Many developers are willing to get rid of the Polish real estate, even at half price from what was paid by them for the land in 2007. A lot of developers simply have no choice, because banks require repayment of loans.

Mentioned above idea is illustrated on the example of the Spanish real estate operator «Sando». In 2007 «Sando» managed to get 5 acres of land in the Polish capital Warsaw. And the deal was preceded by active struggle with other contenders for, as it seemed, a tasty portion of Warsaw soil. As a result «Sando» had to pay for the land in total of 370 million zloty. Today, according to experts, the cost of the site is lower at least by 130 million of the original amount paid.

On the background of falling prices in the developer market Polish analysts also predict continued decline in prices in the private housing market. Here prices dropped by 500-1000 zloty depending on the city. The most expensive in Poland are traditionally considered Warsaw and Krakow. However, even in these cities housing costs continue to decline, mainly due to very weak demand.

Ilya Kalachev

Date: 20/05/2011

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