While property sales in Warsaw appear to be still on an increase, the overall Polish property market seems to be taking a nose dive. Some real estate agencies like, Ober-Haus blame the difficulties of obtaining home finance as the culprit for this turn of events.
Many property developers of recently completed projects, seem to be offering promotions and ‘discounts’ to home-buyers. But the talk of price reductions seems to be making many buyers cautious and waiting, rather than buying.
Another part of the apparent hesitation by investors is the mandatory 30 percent LTV down payment required for property purchases; which seems to be leaving too many people who already deem buying property too risky out of pocket.
Here is a small overview of the current state of real estate in some major Polish cities:
- Wroclaw has seen a tremendous slow down as developers struggle to get finances approved. To make matters worse, buyers are facing the same hardship and this has driven the lower end of the market because of affordability reasons.
- Krakow has seen a large demand for the “popular apartments” in the region of Z‚.7,000 per SQ. M. The whole situation is heavily dictated by the demand of buyers.
- Lodz has an oversupply of unsold apartments prompting developers to tempt buyers with good buys in well developed residential areas.
- Katowice is seen as the supplier of turnkey apartments with no expected price drops real soon. Also the fact that developments are on the lighter side in the area makes existing real estate more pricey.
- Porznan is favoured by expat investors who are currently waiting for a market stabilisation. Since the market dropped many have lost out on their initial buys making them anxious to recap their losses once the market appreciates again. This is now a good market for buyers as they can pick from the bunch.
Dom Development, one of Poland’s largest builders is hard hit by the decline and is having to embark on heavy cost slashing, abandoning projects and reducing prices.
While the company sold 90 flats in September, the number drastically declined by October with only 30 sold flats.
Dom’s Chief Executive, Jaroslaw Szanacja says: “This is the worst crisis we have faced. We’re being hit by two storms at once.”
Leszek Czarnecki, the owner of Getin Bank says “Credit availability has disappeared. Almost all loans to developers have been halted. A lot of them are in a tragic situation.”
Photo credits: Magro [via Flickr]