Poland

Prices are falling in Warsaw.  Here are three takes on how much prices have fallen:

• The highly-respected REAS reports that average prices of residential units in Warsaw fell 7.34% y-o-y to Q1 2012 (-10.94% after inflation). 
• Ober-Haus reports, for apartments only, a lesser price decrease of 2,62% during the same period (-6.20% after inflation).   
• The Global Property Guide finds that average price of apartments in high end districts fell 7.44% during the year to April 2012, from €2,931 in 2011, to €2,713 now.

Rents have also dropped, by an average of 3.27% according to Global Property Guide research. This means that average rental yields have increased slightly to 5.68%, up from 5.41% last year.

Apartments in Srodmiescie, which includes the historic neighborhoods of the Old Town (Stare Miasto) and the New Town (Nowe Miasto), are the most expensive in Warsaw. 

Yet they are really not expensive, compared to the prime districts of other European cities.  Srodmiescie apartment prices range from €2,936 to €3,326 per square metre (sq.m.), with gross rental yields ranging from 4.89% to 5.79%.

Mokotow, located just below Srodmiescie, houses many foreign embassies and companies. It ranks second in terms of property prices, after Srodmiescie.  Prices for apartments here range from €2,305 to €3,463 per sq. m,.   Property investors can expect higher rental returns in Mokotow than in Srodmiescie -  especially with smaller apartments, whose rental yields average 6.78%.

Meanwhile, in the other popular Warsaw areas Ursynów, Wilanów, and Żoliborz, apartments are cheaper, ranging from €2,174 to €2,473. Property owners can earn moderate to good rental returns, ranging from 5.41% to 6.16%.

In Krakow, average apartment prices decreased by 7.54%, from €2,786 to €2,576 per sq. m. But rental incomes have also fallen, but by less, so that  rental yields have increased here too. The average rental yield on apartments in Krakow is 4.94%, better than in 2011, when Krakow rental yield were at 4.26%.