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Poland Passes Act To Limit Spread On Forex Currencies


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#1 inflating

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Posted 10 August 2011 - 10:54 PM

http://www.thenews.p...ortgage-holders

A number of Poles took mortgages in Swiss Francs, but it has doubled against the Polish Złoty (phonetically it's "zwattee" btw) leaving some Polish mortgage payers up the creek, although I am yet to see what I'd call any cheap property in the cities.

The Polish govt have passed a law to limit the spreads between buy and sell prices, as far as I can tell. That should also help me when I change s into Polish currency.

Government of Poland seems pretty good from my point of view - interest rates are 4.5% and they say they will keep a firm eye on inflation and seem to stick to their word, probably because Poland had a bout of hyperinflation a decade or two ago

City property prices still look steep to me, however, although those who do the stats say all cities except Warsaw have seen a price correction in the last year or so. I can't say I see any bargains at the moment - most Poles live in huge blocks of flats, literally 1000 flats to a block is not uncommon, there are far fewer houses than the UK and I'd only really ever want to buy a house if I bought in Poland, as flats aren't my thing unless a really good spec.

More and more younger Poles speaking a bit of English though, and they all seem to work hard here, so wouldn't be surprised to see Poland motoring as an economy in years to come

#2 Paul77

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Posted 10 August 2011 - 11:17 PM

Hello, Pole here...

This act is simply an act of propaganda rather than an act of help.

For those who took a mortgage in Swiss Franc it means that rather than converting Polish Zloty to CHF at the bank rate they can go somewhere else to buy and then deposit CHF directly. The problem is there is not enough paper currency in circulation so they're left without much choice anyway...

There is NO help available, unless people start short selling CHF massively.

Imagine 700000 mortgages in foreign currency, majority of them in the boom era with low deposits. 3 years later that foreign currency DOUBLES the value. Combined with property prices going down, I bet 250000 of them are in negative equity... There may be examples of... are you ready? 200%+ LTV!

Here you can see CHF/PLN for the last 3 years.

#3 inflating

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Posted 11 August 2011 - 07:47 AM

Hello, Pole here...

This act is simply an act of propaganda rather than an act of help.

For those who took a mortgage in Swiss Franc it means that rather than converting Polish Zloty to CHF at the bank rate they can go somewhere else to buy and then deposit CHF directly. The problem is there is not enough paper currency in circulation so they're left without much choice anyway...

There is NO help available, unless people start short selling CHF massively.

Imagine 700000 mortgages in foreign currency, majority of them in the boom era with low deposits. 3 years later that foreign currency DOUBLES the value. Combined with property prices going down, I bet 250000 of them are in negative equity... There may be examples of... are you ready? 200%+ LTV!

Here you can see CHF/PLN for the last 3 years.


Thanks for posting Paul - or Pawel? :)

When I get my currency from a UK bank directly,such as GBP to PLN, I get a bad rate. If I go through a Forex firm (eg Fair FX) I get a much better one - I just transfer money in GBP from the UK bank to the Forex firm and they give me a really good rate. Surely anything that helps the Polish people with CHF mortgages is better than nothing? Of course, the PLN being stronger against the CHF would be the best thing.

Also, if so many are in negative equity, I'm not yet seeing cheap places in the cities. Are they receiving help to keep them from being repossessed? With a shocking 200% LTV I'd have thought half the city here were up for sale and desperate, but although I see the for sale banners hanging from balconies I don't see good prices (in my opinion, considering the typical Polish wage of 2000 to 3000 PLN a month).

Do you think people will vote PiS in October, or has the mortgage problem not affected people in the more PO areas?

Very good to hear clearly expressed views on this from a Pole, dzięki

#4 Peter Hun

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Posted 11 August 2011 - 08:44 AM

Thanks for posting Paul - or Pawel? :)

When I get my currency from a UK bank directly,such as GBP to PLN, I get a bad rate. If I go through a Forex firm (eg Fair FX) I get a much better one - I just transfer money in GBP from the UK bank to the Forex firm and they give me a really good rate. Surely anything that helps the Polish people with CHF mortgages is better than nothing? Of course, the PLN being stronger against the CHF would be the best thing.

Also, if so many are in negative equity, I'm not yet seeing cheap places in the cities. Are they receiving help to keep them from being repossessed? With a shocking 200% LTV I'd have thought half the city here were up for sale and desperate, but although I see the for sale banners hanging from balconies I don't see good prices (in my opinion, considering the typical Polish wage of 2000 to 3000 PLN a month).

Do you think people will vote PiS in October, or has the mortgage problem not affected people in the more PO areas?

Very good to hear clearly expressed views on this from a Pole, dzięki


Poles are keeping up with paying their debts. The overhang of being liable for them even after death helps keep focus. No chance PIS will get in power IMO. Too crazy.

#5 inflating

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Posted 11 August 2011 - 11:04 AM

Poles are keeping up with paying their debts. The overhang of being liable for them even after death helps keep focus. No chance PIS will get in power IMO. Too crazy.


Yes, people seem to be at work here, I don't see repos although can't be 100% sure

Is it not the case that no Polish party since 1990 won 2 consecutive terms? If that's so, won't PiS be next in to bat after PO?

#6 Paul77

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Posted 11 August 2011 - 06:37 PM

Thanks for posting Paul - or Pawel? :)

Pawel ;)

When I get my currency from a UK bank directly,such as GBP to PLN, I get a bad rate. If I go through a Forex firm (eg Fair FX) I get a much better one - I just transfer money in GBP from the UK bank to the Forex firm and they give me a really good rate. Surely anything that helps the Polish people with CHF mortgages is better than nothing? Of course, the PLN being stronger against the CHF would be the best thing.

Yes, but the act does not say about high bank spreads, the translation is a bit confusing. The act says that one who has a mortgage denominated in foreign currency can deposit this currency directly rather than depositing Polish currency then converted at the bank rate. I doubt if it will have any effect on foreign transfers... The act may help people with mortgages denominated in USD or EUR as there is plenty of paper currency on the market, whereas CHF is a niche...

Also, if so many are in negative equity, I'm not yet seeing cheap places in the cities. Are they receiving help to keep them from being repossessed? With a shocking 200% LTV I'd have thought half the city here were up for sale and desperate, but although I see the for sale banners hanging from balconies I don't see good prices (in my opinion, considering the typical Polish wage of 2000 to 3000 PLN a month).

I am not aware of any help, and yesterday the Prime Minister announced there will be none. Current high prices is a combination of deluded sellers and banks who are a bit afraid to pull the trigger. Good thing is that in general people keep up with repayments, but according to my knowledge banks started sending letters to these in negative equity asking for more deposits, and the amounts aren't small...

Keep in mind that even though CHFPLN went up, Libor went down which diminished the amount of monthly rate.

Do you think people will vote PiS in October, or has the mortgage problem not affected people in the more PO areas?


Not sure really... we'll see it in 2 months time :) I think you're right that in Poland is hard to be reelected for a ruling party :)


Just a few more words about property market in Poland.

Prices are extremely high compared to wages due to the fact banks use a completely different method to determine one's ability to repay. Basically they take the mortgage needed, calculate monthly rates and then check if someone is able to repay it. We're worried here in the UK about average property price / average salary hitting 5, whereas in Poland it may have hit 15. I think it's still over 10... Anyway, it is a bit hard to compare Poland vs UK as we tend to use square metre price rather than quantity of bedrooms. Also, property market is a bit hard to track as we lack indicators similar to those produced by Nationwide or Halifax. Have a look here... the biggest website I think, they inform about average asking prices per square metre by city in the previous month.
Also, as far as I know, all the mortgages in Poland are on Variable Rate, never seen a Fixed Rate or Interest Only. Any rises/drops in IR have an instant effect.

btw. How often do you go to Poland and where?

#7 inflating

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Posted 11 August 2011 - 07:45 PM

Pawel ;)


Yes, but the act does not say about high bank spreads, the translation is a bit confusing. The act says that one who has a mortgage denominated in foreign currency can deposit this currency directly rather than depositing Polish currency then converted at the bank rate. I doubt if it will have any effect on foreign transfers... The act may help people with mortgages denominated in USD or EUR as there is plenty of paper currency on the market, whereas CHF is a niche...


I am not aware of any help, and yesterday the Prime Minister announced there will be none. Current high prices is a combination of deluded sellers and banks who are a bit afraid to pull the trigger. Good thing is that in general people keep up with repayments, but according to my knowledge banks started sending letters to these in negative equity asking for more deposits, and the amounts aren't small...

Keep in mind that even though CHFPLN went up, Libor went down which diminished the amount of monthly rate.



Not sure really... we'll see it in 2 months time :) I think you're right that in Poland is hard to be reelected for a ruling party :)


Just a few more words about property market in Poland.

Prices are extremely high compared to wages due to the fact banks use a completely different method to determine one's ability to repay. Basically they take the mortgage needed, calculate monthly rates and then check if someone is able to repay it. We're worried here in the UK about average property price / average salary hitting 5, whereas in Poland it may have hit 15. I think it's still over 10... Anyway, it is a bit hard to compare Poland vs UK as we tend to use square metre price rather than quantity of bedrooms. Also, property market is a bit hard to track as we lack indicators similar to those produced by Nationwide or Halifax. Have a look here... the biggest website I think, they inform about average asking prices per square metre by city in the previous month.
Also, as far as I know, all the mortgages in Poland are on Variable Rate, never seen a Fixed Rate or Interest Only. Any rises/drops in IR have an instant effect.

btw. How often do you go to Poland and where?


Thanks Pawel, interesting insights there

Am in Wroclaw now, been here most of the last 11 months. The new Skytower is near me, looks impressive, from the ground it looks like it has a huge multi storey car park that is almost as high as the top floor - but maybe it's not a car park but just looks like it

People here seem to be busy with jobs, trams are packed, everyone smart, a few of the usual unsavoury characters hanging around and drinking all day but a lot better behaved than their counterparts in Britain - although two odd looking men used the Polish word, that one beginning with K ;) at me today as they cycled on the pavement from behind me - must've been the EPI carrier bag I had - yes I had spent all of 2 zl 40 gr in there :D or maybe I just look like that sort of bloke!

#8 Peter Hun

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Posted 16 August 2011 - 01:04 PM

When I get my currency from a UK bank directly,such as GBP to PLN, I get a bad rate. If I go through a Forex firm (eg Fair FX) I get a much better one -



I take cash and convert at a Kantor, here in Krakow the spread is about 0.5% or less. With cash you have to have proof the money is not proceeds of crime, bank statements and withdrawal receipts to show to UK customs. Anything over 1000 can be confiscated anywhere in the UK.

Edited by Peter Hun, 16 August 2011 - 01:06 PM.


#9 inflating

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Posted 16 August 2011 - 09:58 PM

I take cash and convert at a Kantor, here in Krakow the spread is about 0.5% or less. With cash you have to have proof the money is not proceeds of crime, bank statements and withdrawal receipts to show to UK customs. Anything over 1000 can be confiscated anywhere in the UK.


I get better rates than the local bureau de change using my UK plastic, honestly. Sometimes locally they will give me a few grosh more if I nag, but with the plastic and a normal Polish bank's ATM I get better rates :) Not sure if I can beat 0.5% but I don't think there's one that good here

Edited by inflating, 16 August 2011 - 10:00 PM.


#10 Peter Hun

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Posted 17 August 2011 - 09:13 AM

Here an example http://www.baksy.pl/kantor/index.php3 they buy/sell GBP @ 4.75/4.65 which is a total spread of 0.4%

Here is a list for Wroclaw

http://www.kantor.pl/wroclaw.php

#11 Paul77

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Posted 20 August 2011 - 10:26 AM

I take cash and convert at a Kantor, here in Krakow the spread is about 0.5% or less. With cash you have to have proof the money is not proceeds of crime, bank statements and withdrawal receipts to show to UK customs. Anything over 1000 can be confiscated anywhere in the UK.


Are you sure it's 1000 not 10000? The former is not that much really... Where did you get the amount from?

#12 Peter Hun

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Posted 22 August 2011 - 01:12 PM

Are you sure it's 1000 not 10000? The former is not that much really... Where did you get the amount from?

Damn sure. It was told it verbally during a interview, there is a notice to that effect on the wall in customs at Stansted (stop after going through the x-ray machines, its on the wall next to where the customs officers desk is located) and its also on government/advice centre web sites.
e,g.

The police can seize cash of 1,000 or more if they suspect that it could be the result of the proceeds of crime.

http://www.adviceguide.org.uk/scotland/your_rights/legal_system_index_scotland/police_powers_scotland.htm

Edited by Peter Hun, 22 August 2011 - 01:13 PM.





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