Hi can anyone provide any info on the current rate of wage growth in Poland???

Although I feel property there is still overvalued, providing wage growth is still high as before then the Price to Earnings ratio and affordability should improve somewhat and bring back prices to a reasonable value (unlike the UK).

Cheers.

Annual pace of average wage growth in Feb.'09 decelerated to 5.1% YoY , the lowest level since late 2006.
The registered unemployment rate at end of Feb'09 rose to 10.9% from 10.5% at the end of Jan '09.

Apart from Warsaw, the major cities experienced a deepening in annual fall off in apartment prices . However, only in the case of Krakow was the price drop in double digits at 11.5% YoY.

As a result of wage growth , fall in apartment prices & interest rate cuts a noticeable increase in affordability can be observed on the local Polish market.
However , changes in terms of credit policy from the majority of high street banks has led to significantly lower availability of mortgage credit.

Cheers cc.

The way I see it is that when Polish wage growth was around the 10% mark, the potential for capital growth was great.

The Rule of 72 states that any object rising at 10% per annum will double in 7.2 years. On this basis the purchasing power or salaries of Polish buyers was doubling every 7 years. This was highly bullish for Polish property.

Now that growth is down to 5% then we will likely see a fair period of time before property has the fundamenals of low price/earnings for the next upleg of price growth. Nonetheless, at 5% the long term driver for property growth should be good I hope.

Another factor worth considering is that the demand/supply gap for Polish resi property is set to widen over the next no. of years . Low levels of new construction finance/mortgage finance are availble & as a result many developers are swithching existing resi projects into office/commercial projects where they can.
There is currently an overhang of recently completed projects but once this is sold demand will soon outweigh supply again in the short / medium term which will result in price increases for new projects over the next 3-5 years .

Interesting.

Is it possible to name any cities in Poland which look better positioned than others for growth in the next 5/10 years?

Warsaw, Warsaw, Warsaw..

Warsaw is the largest residential market in the country & accounts for 30% of the total countrywide output.

Unemployment is Warsaw runs at 2% , compared to 10% nationally.

Average monthly salary in Warsaw is 30% higher than in the rest of the country.

A more interesting question is which of the districts within Warsaw are better positioned for growth in the medium term ??

If I was a betting man I'd say Wola, Bemowo, Wlochy & Praga..

Many thanks for the advice cc.

What do you think about Wilanow? Is it oversupplied, with too many apartments coming on the market? It seems as though PS investors have done well here in the past, and it would be nice to pick something up while the market is weak.

It's possible i-PA will have some units in Wilanow available, minsk, or Warsaw in general. Give them a call and ask for Maria, see what she has.

I like Wilanow as a location & it remains one of the most sought after areas in Warsaw .
The rental market in Warsaw is getting stronger & units in Wilanow are renting quickly & getting c. PLN 40 m2
Huge variance in price in the area though with units available from PLN 6k m2 to PLN 11k m2.
There are also a couple of small housing developments ( c. 30 houses per development ) in Wilanow/Powsin that are selling off at close to cost.

cc.

I have a small ground floor unit at Marina Mokotow, Warsaw which has remained fully let since completion 2 years ago.

What in your view are the prospects for this area and for this development in particular?

Thanks