It turns out that Bartosz Stawiarski, one of the commentators that CIJ likes to quote, has his own blog. In the latest entry, Stawiarski claims that the poor level of math education in Poland contributed to, among other things, the skyrocketing prices of new flats in the years 2006-2007.
An unprecedented carefreeness about costs showed recently when the bubble on the residential market was growing dynamically (not only in Poland, by the way). Thousands of families gave in to crowd mentality, according to which one had to buy a flat at a price that exceeded its real value up to three times. The purchase would be leveraged with a mortgage loan to be paid back through most of one’s lifespan. The mortgage would be best taken in the then record-cheap Swiss franc, following advice of so-called consultants who were either incompetent or cunning to foresee the Polish złoty become only stronger and stronger. One’s sense of maths and economy failed completely, as passive approval set in of a vision that the then market trends would be forever. (…)
As a result, the price of a resi sqm at the peak of the boom, in 2007, exceeded CHF 5,000. That meant paying in excess of one’s quarterly salary per sqm as well as the mortgage’s total sum and the amount of repayments to be paid monthly even for 30 years. (…) We’ve been seeing things getting back to normal in the last 18 months, though the process isn’t half-done yet.
Well, you can argue that the wild race to buy flats had as much to do with mob psychology than with math. Nonetheless, with the Swiss franc stronger and residential prices down (at least a bit) there certainly were buyers in 2007 that overpaid. The reality check for Stawiarski’s claims will come later this year, which is when some predict that prices will stabilize and get ready for a new upward march. Developers are surely the quickest to say so and CIJ will run an interview with one of them in the upcoming summer issue. Stay tuned.