Reply to: For those thinking of moving abroad

[Euro-commuter]

Three things keep coming to mind:

1. The don't make land anymore

Come back and say that after PM Gordon Brown frees up lots of extra land for building hundreds and hundreds of thousands of new houses, and the pressure is taken off the market. That'll be enough to burst the bubble.

[wendigo100]

Three things keep coming to mind:

1. The don't make land anymore

2. Bulgaria are now part of the EU, and will get loads of money and other help to advance their economy

3. It's not that far away, with quite a nice climate and nice countryside

It would seem to be a good long term bet.

[tim123]

Yep, that's the new normal. All the world will become rich thanks to house prices. We'll all be millionaires. Well, with the exception of AtW, obviously.

Yep, just like dot com shares at 1000 times earnings was the 'new norm'.

tim

[tim123]

It can't last, if it depends on the average Bulgarian to buy them.

Which eventually it will. There's only so many foreigners prepared to invest in a location such as Bulgaria. Once they are all fully invested there will be nothing keeping the prices up at 'foreign' values and the market will revert to whatever the locals can afford.

tim

[woo]

none taken.

morocco is worse, average salary is £2500. foreign investors are paying over £100,000 for flats.

- everlasting prosperity for all.

[milanbenes]

LoneGunMan,

agreed :-)

woo, apologies, the reply was a little harsh, but there was some
foundation to it

Milan.

[Euro-commuter]

all that should push prices to 3-4 x salary instead of 0.50-1.00 x salary under communism, not 16 x salary.

3-4 x salary is the long term average in the western world, unless 16x is the new normal, I doubt it.

The foreign investors that have got carried away are holding up the market.

And they may continue to do so. I do see the same in the N Highlands of Scotland: house prices are out of all proportion to incomes in the area. This is not irrational exuberance on the part of the Highlanders, it is the fact that the people buying most of the houses have made their money elsewhere (for example, in the overheated housing market of SE England). No sign of Wester Ross house prices collapsing: the buyers are not selling.

[The Lone Gunman]

if you don't know what you are talking about it's better not to contribute

That never stopped you!

[Francko]

3-4 x salary is the long term average in the western world, unless 16x is the new normal, I doubt it.

Yep, that's the new normal. All the world will become rich thanks to house prices. We'll all be millionaires. Well, with the exception of AtW, obviously.

[milanbenes]

woo,

if you don't know what you are talking about it's better not to contribute

maybe there's a different thread where you can offer some value ?

Milan.

[woo]

all that should push prices to 3-4 x salary instead of 0.50-1.00 x salary under communism, not 16 x salary.

3-4 x salary is the long term average in the western world, unless 16x is the new normal, I doubt it.

The foreign investors that have got carried away are holding up the market.

[milanbenes]

woo I've built a house in CZ for my family so I have some familiarity with the situation in the region

there have been two rises as I see it

the first wave of rises was the price corrections following communism

the second wave which we are in now is the combination of the locals being empowered with mortgage credit which they didn't have before in communism, AND foreign investors, the current rise as I see it however is driven in the largest percentage by locals and their mortgages

all the best, do your own research etc, investments can go up and down and yes you can lose your shirt and never borrow more than you can afford if at all

howzat ?

Milan.

[The Lone Gunman]

so you bought one then?


If the guy who bought at 10k took his profits and ran he'd be ok. The trouble though is that most of them get carried away with it, keep borrowing and buying more and then end up losing their shirt.

He still believes it is a good market. He is good at this.
[edit]A lot of this is prospecting on the holiday homes market, not the local market. It seems many people are looking for different holiday destinations. A lot of the flats are being purcahsed or rented by time share and similar businesses.

[woo]

you have to put things into perspective folks
.

so you bought one then?


If the guy who bought at 10k took his profits and ran he'd be ok. The trouble though is that most of them get carried away with it, keep borrowing and buying more and then end up losing their shirt.

[Francko]

morning Franko,

do enlighten us

was it a typical crash driven by an unsustainable bubble with investors not doing proper research ?

Milan.

Yes it was an unstainable bubble and when the economy was hit by a recession in 2001-2 prices started to tumble. Now in 2007 they are picking up again finally. I would suspect the same may happen in many european countries soon after a period of long economical growth. Some of it is not real and prices are artificially high (i.e. any reason why a decent flat in Vilnius can cost 200k pounds when the average salary is about 5k pounds a year? It won't last. Period.). Besides after a long growth there is always a period of decline-adjustment as some of the growth is not due to real reasons, this is not a possibility but it's a pattern that will always happen - it's only a matter of when it will happen. Of course if you think to retire in the country and keep the house for 20-30 years then is less of a problem (but still I'd rather wait a while to buy it cheaper).