||Polish real estate market is still displaying downturn characteristics, the consequence of a difficult financial situation of the whole country. Real estate requires considerable financial outlays. At the same time, there are no free assets for investment on the market and business entities have no liquidity. Consequently, these conditions exert negative impact both on the number, as well as, the volume of transactions. In 2001 the growth rate of Polish economy declined. The growth rate of GDP amounted to 1.2%, budgetary deficit equaled ñ4% of GDP, and the inflation rate stood at 4.5% In the course of the election campaign for the Polish Parliament an ominous ìbudgetary holeî was discovered and the situation of the economy was made even worse by galloping unemployment and discouraging proposals of budgetary reforms and tax hikes. 2002 brought a further decline of GDP. The total value of real estate transactions dropped to one million PLN of GDP and unemployment index reached 18.75. Yet, inflation settled at 1.8% which was a positive indication.