The Economic Crisis in Relation to the Baltic Sea Coast Recreational Apartment Market

Polandís Baltic Sea coast is one of the most attractive sections of the Baltic Seaís coastline. It has plenty of resorts renowned throughout Europe, with their beginnings as centres of health and recreation in the 18th century. The coastís mild climate makes it a particularly attractive investment zone, especially in light of global warming and the urban over-development of southern Europeís resort areas. Since the 1990s there has been an increase in traffic of patients and holiday-makers from Western Europe. Residents of other Baltic countries and the Netherlands are particularly numerous. These are mainly middle-aged and older people. With regard to medical, health and recreational services, they have the most buying power, which means that they make up a large portion of the effective demand. The studies conducted on the seaside holiday apartment market by the Investment and Real Estate Faculty of the Pozna_ Economic University show that in light of the global economic crisis there has been a deep correction of prices on this market, which will obviously create many investment opportunities on this market. The beginnings of the correction were observed in the fourth quarter of 2008. They relate to a decrease of apartment prices by about 10 per cent ñ 15 per cent, as well as of construction services by about 20 per cent. Based on preliminary study results the authors estimate that in the second half of this year the correction in the prices of newly built apartments and those now being built will amount to 20 per cent ñ 30 per cent, construction services up to 40 per cent, and the prices of land for building holiday apartments from 50 per cent to 70 per cent (counting the price decreases from those of the boom period on the seaside apartment market in 2007 and the first half of 2008). At present there are 15 apartment investments underway on the entire Polish sea coast (within 1 km of the coast line), with a total of 2,291 apartments, including nine investments with a total of about 1,445 apartments in Western Pomerania. Existing, projected and currently constructed lines of communication by land (connected to the German Autobahn system), air (airport in GoleniÛw) and water (ferries to such Baltic ports as Ystad, Copenhagen from _winouj_cie; a water trail from Berlin to the Bay of Szczecin) make Western Pomerania comparable to such Baltic Sea coastal regions as Rostock and Malmˆ.