Secondary flood

According to a number of industry experts, the amendment to the law governing the activities of housing cooperatives could cause a drop in property values on the secondary market. The new law, which came into effect at the beginning of this month, allows residents with cooperative ownership rights to gain full ownership of a given property for a nominal sum.

Housing cooperatives have been given three months as of July 31 to execute the proper agreements with individuals who qualify for transferring ownership rights. Failure to comply on the part of the administration could result in fines or jail time, addressing fears that the deadline will pass before all applications are processed.

According to Mariusz Kania, president of the board at Metrohouse, a real-estate agency and consulting firm, a number of such properties will be put up for sale as soon as the paperwork for transferring ownership is finalized. This could contribute to a drop in prices and a residual slump on the secondary residential market, primarily with regard to units located within cement-block housing estates of the 1970s and 1980s.

"Our forecast sees the demand for apartments acquired under the new law falling by up to a third," said Kania. "Prices per sqm should not surpass zł.8,000," he added. This is some 80 percent of the average price commanded for properties in neighborhoods like Warsaw's Ursynów, Bemowo, Bielany and Praga Południe.

The new law also relieves owners of apartments formerly held by the cooperative from the obligation to pay maintenance fees, which Kania believes is certain to cause problems down the line with regard to financing renovation projects.