Poland: realties in depression
The global financial crisis has led to a drastic decline of flat sales in Poland. According to the Polish association of brokers and surveyors (PFRN), sales figures have gone down by 50% during the last weeks. This trend will continue - or even accelerate - until the end of the year; sales could drop by 30%, say experts. Even prestigious projects such as the planned 220 m "Sky Tower" in Wroclaw are struck by the crisis. Many customers have withdrawn their reservations, explains the owner of the developer LC Corp., Leszek Czarniecki. For this reason, he put construction works to a halt for half a year.
Prognoses: minus 30%.
The biggest Polish developers adjusted their prognoses for this year downwards. J.W. Construction recently explained that their profit, amounting to 150 million zloty (€43 million) is approx. a third under the initial expectations. According to experts' assessment, the situation is considerably more difficult for small companies. Of the 500 developers currently on the Polish market, "at least some dozens" will not survive the crisis, claims Tytus Misiak of the Association of Home- and Housebuilding Companies in Krakow.
40% without financing
The reason for this developent are the increasing demands that banks place on the grant of mortgage loans. While before, borrowers could go into debt with a sum of well beyond 100% of the property value, banks now generally ask for an equity ratio of 30%. Up to 40% of potential home buyers could be put off by new regulations, says property advisor Reas to Interfax. It is yet unclear how property prices will react. According to a number of estimates, prices have fallen by 10 to 20% since summer and could further sink by another 5% until the end of the year. However, experts do not anticipate a massive price decline.