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Archived Articles
Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
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Poland: Against the Mainstream in Eastern Europe
Poland perfectly illustrates the case of too successful liberal economic reforms that have gone ahead of the time compared to many other Central and East European countries. Just one example to show this relative advancement would be to look at the Warsaw Stock Exchange. In 1993 it was already a popular tool for many ordinary Poles in search for easy money. 10 years later many countries in the same region still don't understand what the local stock exchanges are all about. But when you have relatively developed stock market, you generally follow the global trends, which in the last 3 1/2 years weren't very good. The fall during bad times is the price to pay for the rise during good times. Something similar happened in Poland on the real estate market in the last 12-13 years. The boom years were too good, the foreign investments were too large and the profits' expectations were too optimistic. Since 2001 some years of correction had to replace the excessive optimism. These corrections show that any good story has an end and also that a particular country can't expect to reap indefinitely juicy fruits without making additional efforts. In the case of Poland these efforts are called new structural reforms and financial stabilization. The country was losing its relative economic advantage in the eyes of the foreign investors some years ago. In 1998-1999 it wasn't considered to be a land of easy money as in the years before. Other countries in the same region, starting later and from lower positions have attracted additional interest, not because of their previous successes, but because of their more promising markets. Poland had to take into account this change. The right solution wasn't found earlier, so it would have to be found later. Another example of how macroeconomic data influences the real estate is the devaluation of Polish currency Zloty. In 2003 it lost 20% against the Euro. One of the causes for this devaluation was the fall of the U.S. dollar, but another cause was the lack of new wave of bold economic reforms. All the rest being equal, this trend was a red alarm for any speculative capital to leave the country. For the government in Warsaw this should be a lesson to peg the currency to the Euro, where the lion share of the trade is made. Poland will join EU in May 2004 even after the political quarrels between Warsaw and two of the main players in the Union, namely France and Germany. To benefit fully from the membership it will have to increase again its relative economic advantages, following on its central location in Europe, its large and well-educated population and its lower business costs. The problem is that many of these relative advantages can be attributed to many other countries in the region south of Poland. Some of them have still lower business costs with at least the same high level of education. With the average residential prices in Warsaw near the average in EU the emphasis should be made on the general quality level, which is still below the EU average. The paradox to pay more for same quality apartment in Warsaw than in some big West European cities was a norm in 1990's when there was no sufficient market supply. Now with so many private developers and liberalized credit system to ask $2,000/sqm for new residence in some areas is perhaps too much for investment property. Bringing back its relative economic advantages, launching bold new wave of financial and economic reforms, benefiting fully from the EU membership, hoping for fresh EU economic progress; these are some of the main conditions before we could see another market boom in Poland, similar to that of 1990's.
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See also the directory of companies providing real estate services in, and general real estate information of Poland.
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