Wednesday, Apr 29, 2009
Baltic economy not only collapsing, but rate of collapse still increasing
BBC News: Lithuania's economy shrinks 12%
I remember spending many hours reading about property investment in the new EU emerging markets. Subscribed to the websites and read the books, but felt I missed the boat by the time I was in a position to get involved. Friends told me stories of flats in regal builings in Vilnius going for £8k. Looks like the Baltics are going to be a horror story even before the rest of the EU. Bulgaria is another market I'm watching with interest....
Posted by doom&gloom @ 05:16 PM (1139 views) Add Comment
15 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. doom&gloom said...
Baltic currencies are currently pegged to the Euro. Suspect they will have to drop these & devalue, as Britain's ERM exit at a cost of £4bn under Lamont..
http://en.wikipedia.org/wiki/International_status_and_usage_of_the_euro#With_formal_agreements
2. inbreda said...
£4bn seems so insignificant nowadays
3. inbreda said...
I yearn for the days when £4bn could sink a government
4. jack c said...
@inbreda - in 18 months to 2 years time I suspect it might take £4bn to sink a few pints (quantitive easing and all that)
5. little professor said...
doom & gloom - they're still at it:
http://www.google.co.uk/search?q=lithuania+property
6. alan said...
Isn't it wonderful that we won't have this kind of problem in the UK. Our economy is robust and will only shrink a little (3.5%).
Our CoE Darling said that in the budget speech only last week, and defended it over the w/end. The recession will be over by Christmas.....
You all believe him, don't you?
7. sneaker said...
This headline needs rewriting
"Lithuania's economy shrinks 12% that it never should have grown in the first place"
Sigh, the ills of a credit-fuelled boom and bust. Fake growth leads to real pain, but you can never get enough people to understand that.
8. This comment has been removed as it was found to be in breach of our Blog Policies.
9. p. doff said...
8. watchingthewheels2 said...''whoops.......wrong comment to wrong article....sorry.''
Why do you keep saying that? Do you have some sort of problem?
Really, I'm interested.
10. crunchy said...
7. sneaker said.."Fake growth leads to real pain, but you can never get enough people to understand that."
Growth should come out of quality, otherwise it is just mass crap, that is good for nothing or nobody.
The only type of growth we have had is the rough ar8sed stubble that blocks up the sink plug hole.
Sorry to any members of ZZ Top!
11. doom&gloom said...
LP - interesting to see how much stuff there is still out there.
http://www.propertysecrets.net/forum/greenfields_development_bucharest/10139/34054.html
This was one of my favourite sites from 9-10 years ago. Much better to be on this site than that one, judging by some of the pickles the posters are in...
12. doom&gloom said...
Tales of woe :-(
http://www.propertysecrets.net/forum.html
13. drewster said...
d&g,
Thanks for the link - makes fascinating reading! Don't these people ever stop to think that if it's nigh impossible for them to get a mortgage, how much harder will it be to re-sell those properties?
Also I must question the locations. I can understand the allure of property in nice places, but some of the towns listed are the easterm european equivalents of Hull or Newport. Luckily for these investors, property only ever goes up and you can't go wrong with bricks 'n' slaughter.
14. montesquieu said...
Was in Lithuania in Business in 2006 and early 2007 ... whole place was going mental at the time. I couldn't see where the money was coming from, the hinterland (which is most of the country) is just potato fields and the odd rusting nuclear power plant. They didn't make, invent or trade anything worth speaking of.
Likewise Bulgaria (which admittedly does make a little bit of stuff). Along with Romania this was nothing but a tin-pot sh*ithole that should never have been allowed to join the EU. I watched with incredulity the idiots lining up to buy Bulgarian property.
Just before the .com crash, maybe in spring-summer 2000, I recall doing some consulting work for a telecoms firm in the Thames Valley. In the car park they had a BMW Z3 on a dais. The were struggling to recruit enough people and as well as the usual bounty if you brought in the CV of a mate who then got hired, they were putting the names of staff 'recommenders' in a hat, and every month the winner got a Z3. It was at that moment I knew the bubble was about to burst big time and that fantasy money was being spent that would never be earned. Most of these people so expensively recruited (along with the people who recommended them) were on the dole less than a year later. Our pension funds are still to recover from the money the splurged on that debacle, paying out megabucks to those who sold up and got out early enough.
Anyway both Lithuania and Bulgaria in 2006-7 reminded me of those mad days. A disaster waiting to happen (also see Dubai).
15. inbreda said...
D&G @12
Fantastic link! Saved to my favourites already. So many good quotes! One picked at random: "My ideal world would be just to walk away from the whole deal and recoup my deposit." That's a heady ambition! BTLers aim low, miss the ball!