FT Warns Investors of Property Price Falls in E Europe and Med

[ringledman]

Perhaps the very fact that poles are more than willing to up sticks and ship out to other countries to earn a living is a bad thing for a landlord!

Germans are more lethargic in this regard and will 'grin and bear it' at home to a much greater extent, thus providing tenants.

Germany is hardly pro-landlord. Rent caps and excessive tenant rights.

You may well get a good yield in Germany but capital gains forget it.

I think Germany is a good 2-3 years away from being a worthwhile investment. A lot depends on whether the mortgage LTV get better. Who wants to put 40% down as a deposit? Wheres the gearing?

 

[MichaelDes]

And talking of FDI in Warsaw - View Pages 16-17 of the attached European Cities Monitor Report.



Showing the largest number of companies expecting to locate to Warsaw than any other European city over the next five years.

Page 18 makes some interesting reading of where Warsaw could be by 2012.

Isn’t Cushman Wakefield primarily a real estate company focused on Commercial units etc and based on America's West Coast with a global office network. They are in the business is to sell property, and talk up any market. "Paper refuses nothing" is the saying, seen another article in the back of Belfast Telegraph last week, mentioning research that -residential property up an amazing 50% across all areas of Berlin in the last few years (what rubbish - its -2% to 0% although ISTBC) Amazingly the same company behind the research is selling Berlin property when you Google them. I would personally be wary of these type of companies, as to what they say or forecast unless it was a reputable agency such as A.C. Nielsen or the likes that has no vested interest but purely impartial. Then again the report could be bang on, if it is I wish you all the best with it Ringledman - for the money, of Eastern Countries or Cities, Warsaw is the one I would most have tipped but only if investment done over 24 months ago. As a long term buy however, as you say cities are always best and any correction etc can be weathered through strong rentals.

 

[MaxIII]

Budapest has been floged to death by oversea companies in UK since 2001 - flogging to naive OPI's, why do you think it's immune. Google Budapest property ,to see how many are at it still. Good growth if invested in years ago, not so sure if it was a recent venture.

Exactly, they were one of the first boom EU accession countries - along with Czech Republic, quick to reform, grew like crazy - and yes property boomed. However Hungary has not been in vogue for several years, all the risky foolish investors have already been weeded out, and then there are those who follow the booms to Romania and Bulgaria.

Unlike many of these countries BTL actually stacks up in Hungary now and smart apartments will sell well - resell well.

Hungary's biggest long term problem is population demographics - increasingly elderly population. Removal of border controls and structuring the country as the transportation hub of EU is the right course of action - attracting international workers.

 

[almo]

As a test I put out the post about Croatia, and barely defended it - mainly because I believe that in most East European (especially new accession ones) and large parts of the Med will be hit hard according to this report and rightly so. I wanted to see how long it took for agents or vested interests to hijack the thread. I have no interest in promoting Croatia as the next big thing as any/every place can claim that, nor even as the best place to live (it's purely personal choice). But to go ott in promoting your product does worry.

Hands up of the previous posters who have an interest in the countries they talked up, as owners or agents?

 

[Afuera]

Hands up of the previous posters who have an interest in the countries they talked up, as owners or agents?

Well spotted almo. The other posters that were going to great lengths to talk up the merits of investing in East Europe have already purchased there. Interestingly, they both seem to be hoping for capital gains on the investment. With a tighter money supply going forward, this may be very difficult, even if the other fundamentals might support it.

Make your own mind up on the place. I'm in it for the long haul. I bought a 1 bed flat last November for 328,000PLN its now around 445,000PLN (although no profit is made until you sell!). I think growth will slow to around 10-15% pa and the higher growth will come from the second and third tier cities.

It is the primary reason I purchased in Hungary - isolation from the Western Debt ridden economies - away from the international property development marketing machines.

 

[MichaelDes]

Well spotted almo. The other posters that were going to great lengths to talk up the merits of investing in East Europe have already purchased there. Interestingly, they both seem to be hoping for capital gains on the investment. With a tighter money supply going forward, this may be very difficult, even if the other fundamentals might support it.

Afuera,

I do not know what you are trying to say, is it something naughty to have an OPI and then make comment to defend your case. Surely these are the persons you want to hear from, that's called debate - otherwise being a bear with a one sided rant would be utterly futile and boring. As for some other person throwing in a thread to see who will "bite" - how pathetic is that. I suggest you watch Coronation Street or Eastenders; it would be a better validation of your time.

For the record I have a spread of properties throughout Europe and beyond, in addition to a basket of other balanced portfolios in either commodities or equities. None the less, I welcome general debate on OPI's and always keep my mind open regardless of market sentiments.

No one can predict the future for certainty, we make educated guesses some are turkeys others are good choices. That's why it's best to keep a mixed basket of investment vehicles.

P.S. I have no property interests in either Poland or Hungary - but respect the right of others to do.

 

[Afuera]

is it something naughty to have an OPI and then make comment to defend your case.

No, but the opinions of posters that are cheerleaders for their own investments should be taken with a huge pinch of salt.

 

[MichaelDes]

No, but the opinions of posters that are cheerleaders for their own investments should be taken with a huge pinch of salt.

On that score Afuera, I only agree with you in so far as, Cheerleaders for persona's that have a commercial self interest in selling property in these markets. Sure - they would still be advising strongly on Spain for example, as in recent TV programmes mentioned in earlier thread debates.

But it is different for the typical overseas property investor; their contribution has validation as I think they will acknowledge any shortcoming in the area. I have many dogs in my portfolio over time and would be happy to admit them.

 

[IFT]

No, but the opinions of posters that are cheerleaders for their own investments should be taken with a huge pinch of salt.

I would totally disagree.

Disregarding agents, resellers etc. I am always very much interested in individual investors who give advice on places where they have invested. They will have done , in general, the most research , and are usually the most up-to-date in their analysis.

Its those that disregard others whilst never investing themselves that I totally ignore.

 

[Afuera]

But it is different for the typical overseas property investor; their contribution has validation as I think they will acknowledge any shortcoming in the area. I have many dogs in my portfolio over time and would be happy to admit them.

I imagine your candidness would be in the minority when it comes to these types of investments. I have yet to see many international property investors come out and talk about the "dogs", as you call them, that they currently have on their portfolios. Most of the comments portrayed by the posters almo highlighted are high on wishful thinking and low on facts. Not too sure if they are really a helpful contribution to the debate.

 

[Afuera]

Disregarding agents, resellers etc. I am always very much interested in individual investors who give advice on places where they have invested. They will have done , in general, the most research , and are usually the most up-to-date in their analysis.

While these sources can be a good resource for getting information on the ins and outs of what you need to do regarding taxes, regulation, setup etc a lot of the comments are nothing more than idle speculation. That type of input can't even be called "analysis" IMHO.

 

[IFT]

While these sources can be a good resource for getting information on the ins and outs of what you need to do regarding taxes, regulation, setup etc a lot of the comments are nothing more than idle speculation. That type of input can't even be called "analysis" IMHO.

Speculation . Yes . Of course . Its all about trying to get ahead of the information curve.

But 'idle speculation' conveys that perhaps you are somewhat prejudice against such advice and individual analysis . I think that your grievance may go behond the relevancy of this thread but I wish you luck in your investments.

 

[almo]

So can you tell agents from resellers from etc? Because I certailny cannot at first glance, and most readers will only give it such, 1 glance. So the point that I tried to make, and that Afuera seems to have understood, is that a lot of folks jumped up and spouted wonderful pluses to areas that were at best misleading.

It is interesting to see how others get on in their investments, but a fine line is walked by those who offer "their marvel" and then slip off again to wait for a new thread.

I do believe most posters on these boards are genuine, but not all are.

I would totally disagree.

Disregarding agents, resellers etc. I am always very much interested in individual investors who give advice on places where they have invested. They will have done , in general, the most research , and are usually the most up-to-date in their analysis.

Its those that disregard others whilst never investing themselves that I totally ignore.

 

[MichaelDes]

So can you tell agents from resellers from etc? Because I certailny cannot at first glance

Fair enough Almo, you have a point of sorts. But isn't it worthwhile letting people espouse their speculation and securities regarding their property investment. It is when people do so that it can either be ripped apart (letting them reflect) or else it stands up to scrutiny.

There are generally no free lunches in capital growth in OPI - the quicker an investment goes up the quicker it can fall on the downside. You live by the sword in these types of investment and can die by it too. So unless the fundamentals stack, these investments don't make sense. Some bankers and individuals try to introduce new pseudo science for principles to explain a market such as during the dot.com frenzy or property bubbles (120% CDO's). But it is the traditional measures which always come back into the norm. For a country to have strong property prices there has to be a correlation to local incomes after taxes etc plus other similar relevant factors. The credit crunch could rouse these out and probably will per earlier threads. Is there a mathmatical forumlae for it? Surely some boffin in an investment bank has written a statistical programme to measure its risk. Come on someone within fund management for Irish Life, Hibs etc. must know something?

 

[IFT]

So can you tell agents from resellers from etc? Because I certailny cannot at first glance, and most readers will only give it such, 1 glance. So the point that I tried to make, and that Afuera seems to have understood, is that a lot of folks jumped up and spouted wonderful pluses to areas that were at best misleading.

It is interesting to see how others get on in their investments, but a fine line is walked by those who offer "their marvel" and then slip off again to wait for a new thread.

I do believe most posters on these boards are genuine, but not all are.

From what I see any poster who 'builds' up an investment without merit is quickly shot down. Any forum will have a level of 'noise' but it easy to spot knowledgeable posters from those that may not be. Its just a matter of filtering the information. I did understand what you meant but my initial point is that sometimes when a poster argues in favour of their investment there can be an attempt to bring that message into disrepute out of spite rather than any particular analysis.

 

[MichaelDes]

Michael Palins New EU road trip to Hungary - Sun 7th October, I have no doubt that a place in the Sun will be revisiting Hungary soon.

Just a general observation about Michael Palins programme from Romania last week (or was it Mc Williams - both fairly tedious to watch). Anyways, mentioned CEE to de-populate by up to 20-25% over the next 15 years. Population shifts especially amongst the younger more educated to the mature western states with their higher salaries. Not good prospects for the future.

 

[z106]

No, but the opinions of posters that are cheerleaders for their own investments should be taken with a huge pinch of salt.

THis is a most ridiculous statement.

The reason a person talks up their overseas investment is because they do their research FIRST on a country and THEN decide to buy there if they are happy with their research.

The way you see it is that people FIRSTLY blindly buy in any country and THEN try to fit certain facts to defend the merits of their purchase - hence u say everything must be taken with a pinch of salt.

It's actually the reverse - depending on the strength of their research they then decide to purchase/not purchase.
That's why you'll find most people defending a purchase they have made overseas - because they felt they had enough reason to justify the purchase in the first place !

(As to whether they did proper due dilligence in the first place is a different matter of course! i.e. they may think they did proper due dilligence but to another man,it might be deemed a complete half-assed effort )

 

[Afuera]

The reason a person talks up their overseas investment is because they do their research FIRST on a country and THEN decide to buy there if they are happy with their research.

That's a major assumption to make and there's lots of anecdotal evidence to suggest otherwise.

The way you see it is that people FIRSTLY blindly buy in any country and THEN try to fit certain facts to defend the merits of their purchase - hence u say everything must be taken with a pinch of salt.

I'm happy to see facts regarding any investment, no matter which bias the presenter of those facts hold. Speculation and wishful thinking is another matter altogether though.

 

[MichaelDes]

Most of the comments portrayed by the posters almo highlighted are high on wishful thinking and low on facts. Not too sure if they are really a helpful contribution to the debate.

Afuera,

Let's cut to the chase. You are a bear on this market whilst others are more bullish (whom in the main I disagree with). On perception your thread seems to be arrogant in so far as, if some one doesn't agree with your point then automatically they're wrong. What sort of mindset is that to have at the outset? Therefore

(1)"What contribution should people make that would be helpful to the debate - other than obviously agreeing with your view"?

(2) "Tell me more about the anecdotal evidence per previous thread"?


I think you are a wind-up and doing it for the craic of seeing who reacts? Finally per earlier comment - "Dogs" in my investment portfolio, these are equity choices everyone makes and holds that in hindsight were bad decisions - anyone who did'nt short sell Vodafone for instance or my view of Japanese property 18 months ago - it's not getting the bounce I hoped (but its early days). Anyways, can you elaborate on the above??

 

[Afuera]

On perception your thread seems to be arrogant in so far as, if some one doesn't agree with your point then automatically they're wrong. What sort of mindset is that to have at the outset?

Are you intending to insult me here? Maybe you would prefer a forum where points are not debated and questioned?

(1)"What contribution should people make that would be helpful to the debate - other than obviously agreeing with your view"?

Leaving your snideness aside on that question, I'm interested to hear about some of the facts, figures and reports that people are using in their research of their perspective markets. Things like demographics, employment trends, supply of property on market etc. Hard facts rather than a salesmans pitch. Anecdotal discussion about how people have found there experience could also be interesting but there's a fine line when it can veer into a discussion on how good it is going to be because of X, Y and Z, which are often based on crazy assumptions.

(2) "Tell me more about the anecdotal evidence per previous thread"?

I'm not here to rub people's face in some of the bad decisions they may have taken, but you don't have to go too far to find people buying overseas with little or no research.

http://www.askaboutmoney.com/showpost.php?p=437768&postcount=1
http://www.askaboutmoney.com/showpost.php?p=410684&postcount=1

I think you are a wind-up and doing it for the craic of seeing who reacts?

Contrary to your rather opinionated remarks, I'm not here to wind people up and am genuinely looking for hard facts that can be gleaned on this topic. If you've a problem with any of my posts why don't you hit the "report post" button, and the next time your can keep your personal attacks to yourself.