Over the span of years 2002-2008 real estate prices in Poland

Poland

Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...

have increased drastically. Between June 2006 and June 2007 alone the average price of a square metre in Warsaw rose from 6,683 PLN (1,636 EUR) to 9,540 PLN (2,519 EUR) (over 50% rise in euro

Euro

The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

 terms).

According to a major Polish newspaper, Gazeta Wyborcza

Gazeta Wyborcza

Gazeta Wyborcza is a leading Polish newspaper. It covers the gamut of political, international and general news. Like all the Polish newspapers, it is printed on compact-sized paper, and is published by the multimedia corporation Agora SA...

, the average monthly salary in Warsaw buys 0.26 m², or in Kraków

Kraków

Kraków also Krakow, or Cracow , is the second largest and one of the oldest cities in Poland. Situated on the Vistula River in the Lesser Poland region, the city dates back to the 7th century. Kraków has traditionally been one of the leading centres of Polish academic, cultural, and artistic life...

 0.22 m².

Same sources give rental profitability at 4% yearly. This is lower than interest rates on bank deposits (5% in Polbank etc.).

In early 2007 the Polish property market began to show early signs of a property bubble; these included:

• banks increasing loan
  Loan
  A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
  
   periods from 30 to 50 years to extend credit limits;
• over 1 million families already in debt, and roughly 300,000 more going in debt every year;
• increasing interest rates - analysts predict 6% by the end of 2007 (from less than 4% in 2006);
• number of new apartments for sale in Warsaw at one of the oldest Polish real estate portals: tabelaofert.pl increased from around 1,750 in November 2006 to over 4,300 in June 2007 to over 11,000 in July 2008;
• exotic companies declaring real estate development plans;
• Polish economy
  Economy of Poland
  The Economy of Poland is a high income economy and is the sixth largest in the EU and one of the fastest growing economies in Europe, with a yearly growth rate of over 3.0% before the late-2000s recession. It is the only member country of the European Union to have avoided a decline in GDP, meaning...
  
   showing signs of the overheating: from 2005 to 2007 the forex deficit almost tripled (it had been decreasing in previous years); imports, which were decreasing (by 5%) in 2005, jumped to a 25% increase in 2007;
• stagnation
  Stagnation
  Stagnation may refer to one of the following*Economic stagnation, slow or no economic growth*Era of Stagnation, a period of economic stagnation in Soviet Union*Stagnation in fluid dynamics, see "Stagnation point"*Water stagnation*Air stagnation...
  
   of prices and dramatic drop of sales in a long period of time with dynamically increasing supply of residential properties.

The arguments for further real estate prices rise or stabilization are:

• fast increase of salaries - around 8% per year;
• low figures of both housing estate
  Housing estate
  A housing estate is a group of buildings built together as a single development. The exact form may vary from country to country. Accordingly, a housing estate is usually built by a single contractor, with only a few styles of house or building design, so they tend to be uniform in appearance...
  
   area and apartments per person, compared to other developed countries worldwide;
• money repatriated by Poles who have emigrated;
• rapid urbanization
  Urbanization
  Urbanization, urbanisation or urban drift is the physical growth of urban areas as a result of global change. The United Nations projected that half of the world's population would live in urban areas at the end of 2008....
  
   - the population of rural areas and small towns is declining rapidly, while the population of major urban areas is increasing quickly;
• Warsaw has a population of only 2 million people – approximately 5% of the whole of the country – very low for a capital city.

In 2010 Internet surveys showed that Poland is one of countries with rather high house price to income ratio (13.58 - it decreased from 23.90 in 2009) and estimated rental profitability at 3.92%-4.31%

See also

• Poland
  Poland
  Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
  
  
• Bank of Poland
  Bank of Poland
  Bank Polski is the name of two former banks in Poland, each of which acted as a central bank. The first was founded by Franciszek Ksawery Drucki-Lubecki in 1828 in Congress Poland and functioned until 1885, when it was absorbed by the State Bank of the Russian Empire.The second was founded in 1924...
  
  
• Recent history of the Polish housing market