The end of emerging property markets?!

Riviera

After the turmoil in both Thailand and Hungary, is this the end of the 'emerging markets', specifically the emerging property markets?

For the last few years, the risk premium on investing in higher risk countries has been unbelievably low. After the 'correction' in the stock market at the start of the summer, should be expect a correction in the property market?

I've seen property advertised in Hungary and Thailand as the 'place to be'. Investors in these countries, it would seem, have had bad luck.

I think a swing in sentiment is imminent, with capital being diverted from Eastern Europe and other emerging markets, to more secure, stable markets, like France, Germany and the UK.

hmmm

The turmoil in both countries may be only temporary, so investors may not notice any effect other than short term heartburn

On the other hand, it could be more serious. Hungary in particular has revised their deficit from c.4.6% to over 10% and that has a serious effect on a currency and debt ratings.

Thailand I know less about.

I agree with you on risk premiums. Many overseas residential property investments are sold as if it was no more risky than buying in Rathmines.

ircoha

hmmm wrote:

....
I agree with you on risk premiums. Many overseas residential property investments are sold as if it was no more risky than buying in Rathmines.

If even that:)

nice one mmmmh!

SmoothyG

I think investing in coutries close to or in the EU is far less risky, I dont know much about Thailand but the eastern european countries in the EU look good for investment. Although the holiday rental market is yet to boom, its very early days, i think that the home rental market looks strong. In 5 years when these countries, especially Poland and Latvia get back to thier feet, with their youth returning home there should be a good rise in capital appreciation.

The newer members of the EU are going to grow a lot in the comming years.
I notice that the vast majority of Poles and Latvians in Ireland are in thier 20's and educated, and would be delighted to return to their home countries if the jobs were there. I think that this will attract large American and Japanese companies to invest there. hopefully for them and the strength of the EU as a whole it will bring a lot of money to the ecomonies.

The united economies of the EU are so strong i really cant see any of our countries going down hill.

The more risky, but more lucrative in the short run, overseas investments are around areas considered to be attracting a high tourist trade.
Countries such as Montenegro, Bulgaria, Morocco, Hungary, Croatia etc.
These countries are expecting more investment in tourism from the EU states as we grow in wealth and look for places to spend our cash rewards from our strong economies.
So essentially the stronger the EU gets the stronger the european tourist attracting countries will get. It is quite a beautiful synergy that will hopefully lead to a larger and stronger EU benifiting everyone.

dunkamania

I agree,these properties are being marketed without proper risk disclosure.

As far as Thailand goes,it is expected that the Coup will benefit the country in the long term,as long as elections are held soon.The incumbent prime minister was viewed as being very corrupt

irish_bob

the problem with property prices in eastern europe is they are not dictated by the local population
the property boom if thier ever was one in eastern europe was an off shot of the property market in ireland or to a less extent the uk
irish people when they saw their houses rise by 70 or 80 % in a few yrs decided that mortaging thier own house in order to buy an appartment in hungary or bulgaria for 50 k was a safe bet
that combined with over seas property agents ( most of them irish) telling them theese investments were a sure thing made it a guarenteed recipe for propery in eastern europe taking off
the danger is that when the irish property market begins to cool and it will and the fact that interest rates continue to rise all be it slowly , then irish people will begin to realise that the hole in thier pocket that once burned is begining to die out
when this happens the european market will be completly relying on locals to keep it afloat , and since the locals never kept it afloat in the 1st place
we all know what that means ,
anyone who buys property in bulgaria should know that thee only people who will ever be in the market to buy back that property are foriegners
the problem with that is , foreigners have no loyalty to any market , in a couple of yrs , some other part of the world may be the flaour of the month
and johny and mary from tullamore may have trouble getting back what they paid for thier appartment 10 miles from sofia let alone making any money on it

krille

Hi Board,

This discussion is far too simplistic. It evaluates countries as a whole rather then specific areas within a country.

That would be like comparing Paris to some rural town, comparing London to Bradford, etc...

In all countries you have areas which are hot and areas which are cold (deliberately not using the word "cool").

Being a resident in the UK I definately agree that prices in the South East are extremely high and will potentially level off or fall.

I have been travelling around Europe and east Europe in search for a new project and have not really come accross anything where I could expect a quick rise with good reasons for such rise.

Not long ago we dscovered Morocco especially the areas around Marrakech, Essaouira and Agadir. ==> there I can see some sound foundations for sustainable growth.

As a result I am now looking for co-investors / partners willing to embark on a new property development project in Morocco with me, thus making much more money then by buying property itself.

If you think this kind of investment is for you, contact me by email at: info@prolan-invest.com or visit my website at: www.prolan-invest.com

Kind regards,
Krille