[sticky]
-
steve80
MemberInvestors face meltdown as real estate prices plummet throughout Europe and US. Tens of thousands of investors are facing financial meltdown as hugely hyped Easter Europe property investments turn sour. Lured by unrealistic promises of extraordinary returns, investors borrowed heavily to pick up cheap buy-to-let apartments in Eastern Europe and some Wester Europe countries (Spain, France), but property prices in these so called "hotspots" have begun to plummet in recent months. Along with rising mortgage rates, the strong euro and dismal rental markets, dark clouds are forming for a so- called "Perfect Storm" that could decimate the investment nest eggs of the househunters in the sun. For example many investors are thought to have bought properties in Spain. However, the macroeconomic conditions has pushed the price of some properties down by as much as 20 per cent in Spain's Costa del Sol. The average value of a two-bed home in Mallorca falling €37,000 to €260,000 in the past three months.Similar slumps have been logged in areas from Gran Canaria to Girona and Cadiz. Estate agents are now advertising "price-reduced" homes in almost every region. If you look at a typical two-bedroom apartment in the Costa del Sol, its paper value could be about €250.000 but you'd be hard-pressed to find a buyer for €180.000 - 190,000. Romania and Bulgaria had been touted as a investment "hotspot" but the new figures from investor have revealed that for example the apartment prices in Sunny Beach fell by 5 per cent in February alone. Similar slumps have been experienced in other location as a massive tourist apartments remains unsold. Prices in popular developments such as Sea Dreams Village or the Iglika 1 complex have been reduced by up to one third, according to Icon Properties advertisements. Bulgarian ski resorts such as the hugely hyped Bankso are suffering, with local reports suggesting that the 150 local estate agents have not sold a property there for four months. Yields at some holiday homes and residential developments have tumbled by nearly 50 per cent. Many investors are trapped in Bulgaria and Romania, unable to sell properties and struggling to meet mortgage repayments as introductory "guaranteed rental" deals come to an end. Other hugely popular eastern European or Baltic markets have skidded to a halt, with dramatic price-falls in some countries. Latvia's bubble has well and truly burst, with the Latio Investment agency revealing falls of almost 11 per cent since January 08. Estonia and Lithuania have also experienced decreasing property prices. The central statistics office in Poland has also reported values slipping in the first quarter of 2008. In Budapest, some 6 per cent has been snipped off prices of new apartments, according to the Global Property Guide. A friend of mine is facing losses of about €40,000 after buying a Budapest property for about €89,855 three years ago. He is now trying to sell his property, was advised that the best sale price he can secure now is €67,000. By the time he sells the apartment, he will have paid about €20,000 in fees/ interest, taxes and renovations. The US housing market is also in freefall, fuelled by the sub-prime crisis. The Florida property boom, which lured thousands of fly-to-let investors, has gone into reverse. Investment properties are being advertised with massive reductions all across the state. A property at the Barefoot Beach Resort in Indian Shores has just had $24,000 sliced off its asking price in the past month. Latest Federal data from the OFHEO reveals that 18 of the largest 20 urban price falls have been experienced in Florida and California. Houseprices in Punta Gorda have plummeted 8.12 per cent this year, with Sarasota and West Palm Beach also tumbling by up to 12 per cent. Property values in New York are also down by a 5 per cent in the last quarter. I know of one case in Florida where the house, which has a paper value of $320,000 (€202,300) is advertised as for sell for $200,000 (€126.438). The poor performance of the RON over the past 5 months has also eaten into the pockets of investors in Romania. Since mid-October 07, the RON has lost 12 per cent of its value against the euro. The Mediterranean coast of Turkey is also labouring under the weight of unsold properties. Some apartments from Dalaman to Yaikavaa have had prices slashed by as much as 45 per cent. Properties in Cyprus are also being advertised at "reduced prices", with a new build Coral Bay villa for sale at a massively discounted rate. Some apartments in landmark Dubai developments, ranging from the Marina to the Media Zone towers, are on sale with prices reduced by as much as 12 per cent. One €89,000 studio apartment was on sale having had its price tag slashed by €10,000, with a larger €196,000 apartment now on sale at €174,000. Many people bought properties in eastern Europe on the back of rental guarantees, but rental demand is linked to earnings in a country -not rental guarantees, so the average wage in Romania is about a tenth of what it is in the EU so the rentals should be also a tenth from the renatls in EU but this does not happen.With rental guarantees, agents usually only pay back the money initially paid by the investor to buy the property. Overstretched borrowers are already falling victim to the bursting foreign property bubble. One lender who specialises in overseas finance told me about how he raised €800,000 in equity on his Dublin home to buy apartments in Turkey, Budapest, Brasov, Bucharest and Bankso. The apartments came with a year's rental guarantee, said the lender, and when the guarantee ran out, he realised there was no rental market in those areas. He's put his home as security for these loans, he has no rental income and meanwhile European effective interest rates have gone up by 2.5 per cent. By the end of this year, investors in Easter Europe will be struggling to extricate themselves from some of the investments they've made.Posted 2 years ago # -
armagheddon
MemberSi de ce insisti sa scrii in engleza ? Considerand topica si frazarea, in mod clar nu-ti este limba nativa, intrebarea este: cine esti, de unde vii, de ce e importanta piata imobiliara pentru tine, de ce scrii in engleza pe forumul unui site care este eminamente romanesc (am cautat si nu exista versiunea in engleza a site-ului). Nu ma pronunt impotriva a ceea ce spui, si desi nu sunt complet de acord cu ceea ce spui, ai un fel erudit de a construi o argumentatie, este evident ca ai cercetat subiectul si ca te pasioneaza, insa nu cumva esti un baietel de liceu plin de cosuri din Bucuresti care scrie intr-o engleza in mare parte excelenta (minore scapari) doar ca sa dea greutate cuvintelor lui ?! Daca este asa, cred ca cel mai important ar fi sa inveti sa nu-ti fie rusine cu cine esti, sa nu-ti fie frica sa-ti exprimi si sa-ti aperi opinia, sa ramai vertical cand altii te momesc cu balcanisme! Insa, desi e foaarte utila abordarea ta (romanii se abtin sa injure un strain dar n-au mari retineri fata de compatrioti), cred ca ar trebui sa te opresti si sa semnezi cu Daniel (sau Gabi, Andrei, etc)!Posted 2 years ago # -
steve80
MemberThe collapse of the housing bubble in the USA is becoming a global phenomenon, with real estate prices swooning from the UK and the Spanish coast to Easter Europe and even parts of Asia. This synchronized global slowdown, which has become obvious in recent months, is hobbling economic growth worldwide, affecting not just homes but capital markets and banking industry Housing markets in Europe have soared over the last decade, but now they have started to fall back to earth. Many property analysts in West Europe predict that some countries, Spain, France, UK and Eastern Europe countries, will face an even more wrenching adjustment than that of the United States. As home financing and credit tightens in response to the crisis that began in the subprime mortgage market, analysts worry that these countries could suffer the mortgage defaults and foreclosures. The housing “sharp drop” is spreading. Once-sizzling housing markets in Eastern Europe and the Baltic states are cooling rapidly, as nervous Western Europeans stop buying investment properties in Hungaria, Poland, Bulgaria, Romania and Baltic countries. With stock markets down sharply after reaching heady levels, people do not have as much cash to buy property. These sharp corrections seem to be following the basic law of gravity: what goes up must come down. Low interest rates on short term have been helping to inflate housing bubbles in many countries but things started turn around. Consider Britain, which had one of Europe’s most robust housing markets, within three months, mortgage approvals dropped 41 percent, compared with the previous year and by February, average housing prices had fallen 4.5 percent, the largest monthly decline since nineties. Europe followed the U.S. into never-never land, pushing mortgages out the door, believing that prices would go up forever. We’re waking up from the property dream and finding ourselves in a situation where prices are starting to go down.Posted 2 years ago # -
armagheddon
MemberYou make all this sound like one big [b:b445933099]armagheddon[/b:b445933099] is coming our way (fun obviously intended). [quote:b445933099]Many property analysts in West Europe predict that some countries, Spain, France, UK and Eastern Europe countries, will face an even more wrenching adjustment than that of the United States. [/quote:b445933099] Now really, do you know of any other economy that's so neck deep in the consumer bubble that even remotely resembles the US economy ?! And I'm not sayin housing, I'm sayin full consumer. Yes, the UK consumer market is not that great (mostly because of the regulators who will prevent life threatening bubble bursts like the one that is about to explode in the States - but regulators are a different topic), yes Western Europe is a mature, tough market which slowly moved away from basic consumer fundamentals (but not very far, keep in mind), yes Romania and some of its kind in Eastern Europe are embarking real-estate roller-costers with hidden results..... but from here to global meltdown and back-to-the-cave rallycry is a big damn difference. Global economy has a lot of fresh blood in it, lots of emerging markets to artificially compensate crises: US will go through a crisis, but because of China and EU you won't see the Big Depression happening again ! You also have to look at it through the geopolitics lens: housing doesn't grow on a separate env. from oil, labour migration, national and ethnical emancipation, etc So please don't go apocalyptical on me! And let's keep it down and specific to the Romanian market, 'cause otherwise this will turn into a Financial Times vs. IHT type of dispute which will bore to death everybody else !Posted 2 years ago # -
AristotelCostel
MemberDomnule armagheddon, antiapocalipsa, dar ce se intampla in Spania? Cum explici inflatia din ...Romania, Bulgaria, Letonia, Estonia, Lituania? Toate capodoperele astea au aceeasi problema...real-estate...bubble. A fost seceta in Estonia? :lol: Pe forumul pe care-l recomand, deja avem o imagine clara asupra viitorului Romaniei. Spui cPosted 2 years ago #
Reply »
You must log in to post.