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Eastern Property Bubble At Risk

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A FLOTATION bubble that saw £1bn of east European property firms come to the stock market last year is in danger of bursting.

Last year 19 property companies joined London's junior AIM market - the largest number for seven years. Of these 17 raised a record £1.16bn of new money to buy up both built and unfinished schemes in east European countries from Poland and Hungary to Bulgaria and Romania.

But seasoned City property investors and advisers now fear Britain's large institutional investors have put the brakes on funding new eastern Europe property ventures.

http://www.thisismoney.co.uk/news/article....74&in_page_id=2

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I've never been able to figure-out the craze in E. European property. Sky keep repeating a documentary called 'Bulgaria - The Next Big Thing' (or something) and I always wonder who funded that show and why it keeps getting repeated hypnotically over & over & over again.

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Bulgaria? For God's sake.

One of the last places to succumb to bubble madness, and therefore one of the first to collapse when the global property market suffers the inevitable correction.

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I find this idea of buying a property in Eastern Europe very strange. Almost certainly the buyer from the UK cannot speak the language or know the local customs or law. Once they have bought how often can they visit the property? Lets be generous, say six times a year. What happens to the property for the rest of the year. Can they trust a local agent to let the place out and maintain it? If they do not want to let it out who carries out the maintenance. What happens when the pipes burst or the place is vandalised? More importantly what happens when the cheap air carriers pull the plug to that particular destination?

On Thursday night on Channel 4 a couple bought two properties in Slovakia. Pretty cheap but why? One needed working on. Where on earth can anyone find a reasonable amount of time to leave their job over here and renovate a property over there? The best bit was when it came to offer time they offered the full price because..."they did not want to be offend the seller"

Do these people live in a parallel universe or am I missing something?

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Look at what is already happening to property prices in Spain and France; markets much closer to the UK.

If these markets are unable to sustain prices what hope for Bulgaria. Come on!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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