Credit Crunch - Good News For Eastern European Investors ?

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weathered

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Have just read an interesting article that may be of interest to anyone who has invested in Eastern Europe.



This article seems to make sense to me (even though I declare a slightly biased position in owning a property in Budapest).

I would be interested in other peoples comments on the RICS Survey (which was published on December 3rd).
 
Does Eastern Europe have access to a source of money that is not affected by the liquidity crunch?
 
weathered said:
Have just read an interesting article that may be of interest to anyone who has invested in Eastern Europe.
Click to expand...

Camry...did you mean Ronald Mc Donald for clearer insight? If within commercial, I’ll eat my hat when mature markets such as Germany, Holland etc have little prospect compared to CEE countries. Mature countries are in for a rough ride but if this financial tsunami hits hard, then less mature markets are in for a serious battering. The future of CEE IMO is like this, as banks and moneytraders starts [broken link removed] the screws.

UBS with $14bn w/offs means $150bn less leverage funds in 2008, that's one bank! If anyone has CEE investments your fundamentals better stack, yes remember them, distant memories that were replaced by quick capital flips and appreciation. If these don't stack your investment will soon be .
 
Hi Camry

I am acquainted with who RICS are.

I generally do not trust the information/advise that any organisation proffers. It seems to me that the developed world relies on information gained from the likes of RICS to measure and then deceive/manipulate monetary policy.

Wikipedia gives a nice definition of RICS that I am familiar with...

http://en.wikipedia.org/wiki/RICS

Who can one trust ?

P.S

Never heard of Ken MacDonald, should I trust his advice more?
 
Some quotes from the RICS survey about Budapest:

Occupier Demand:
Economic growth slowed in Hungary during the first
half of 2007 as fiscal tightening measures depressed
real wages and domestic demand growth. Industrial
production slowed markedly leading to a fall in rents for
industrial space in the Budapest market. Nevertheless,
occupier demand for retail and office space held up well.
In the office sector in particular, company growth,
mergers and acquisitions and some large multinationals
seeking prime locations are delivering the highest rental
growth in over a year despite rising availability. These
factors are supporting the highest level of rental
expectations in two years.
Click to expand...
- hardly surprising that expectations are for a rent rise, given the level inflation is at (8%+?).

Investment Market:
In Hungary, purchasing activity continued to boom
across all sectors of the Budapest market. However,
confidence has come off from its peak on fears that the
monetary authorities are more concerned about tackling
inflation than the recent bout of unexpectedly low
economic growth. Indeed Hungary is less well placed
than many neighbours to withstand volatility in financial
markets due to its relatively large current account deficit.
Domestic financial institutions and real estate companies
increased their share of purchases markedly. As with
several other countries in the region, pressure in the
global financing market may slow the pace of yield
compression. This is likely to be more acute in those
centres where the market has been driven by the weight
of money from foreign funds.
Click to expand...

I would love to be able to quote something from the charts, but they are unreadable. From what I could make out, this is a survey of estate agent sentiment. Most of the charts for Budapest are flat or very negative. Not sure what they mean as they are illegible, but I would take it as bad! You may take it as good, given the glossy write-up on the webpage, if you like, but I would look for general eceonomic corroboration from the OECD, the World Bank, Eurostat etc. as sentiment changes seem to lag changes in "fundamentals".
 
Looking at who RICS are, it would be a bit naive to live by their advice. Take it into account but it is best to listen to experts in the industry who are not commenting on something which directly affects their bottom line.
Im not involved in eastern europe at the moment, and while I may be before long depending on a few factors, I would think that this crisis will effect those markets in CEE quite heavily. Im sure many of the banks there that would have been offering mortgages are owned by larger banks who are suffering at the moment.
I know myself - Im about to launch a project in an emerging area and the banks have been reluctant to provide a client mortgage, and Ive really had to push to get it
 
Anyone read the business supp. with Indo last thursday? They had a foreign property 'article' which listed a few countries including Spain and Bulgaria. According to it all markets were up! great to see objective journalism is alive and well and serving the media's advertisers. Funny as I know people who have taken a hit in mentioned countries (A serious hit in Bulgaria).

Its more important now more than ever to know the source and motive of what you read.
 
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