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200% Growth Challenge
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Good morning from Valencia Airport.
I have a challenge - please name any city that has seen over 200% growth (ie a property you bought for 100,000 Euros is now worth 300,000 Euros) in the past 5 years!
Let's make a list of all the really successful property hotspots over the past 5 years.
Why 200%? Well, that is the amount that I believe property prices in Valencia have risen in the past 5 years.
I know this because I moved here over 5 years ago and bought our first property here (sold this spring) for over 200% profit.
How many other cities - across the world - have acheived this growth in the past 5 years? Let's make a list!
There is a reason to this ...
... and it is because I am leaving Valencia today on a fact finding / Max Growth searching trip to the UK, Italy, Hungary, Romania, Bulgaria, Serbia and Croatia to find the next candidates for 200% growth in 5 years.
Let's call it the 200% Success Club (those that did it) and the 200% Opportunity Club (those that have the potential)...
... and let me tell you - now that Valencia is a successful destination - it even has WiFi in its airport lounge! Wow - that really is arriving....
Seriously tho', Valencia won the America's Cup - which play to huge success this June and will in Aug 2008 host a city F1 race around its harbour.
It is also very likely that the next America's Cup will be here too - and even if not - the team bases will remain in Valencia...
... the airport has just completed a new extension and the metro is still adding stations and stops...
... but the property market is dead - hit by a doubling of interest rates ... and isn't going anywhere for a few years.
Most people in Valencia with property will be holding the property for a couple of years now before they will be able to exit and turn their paper profits into real cash.
This is not a problem for those who entered the market 5 years ago - because they can offer a 10% discount to get the sale. Or because the rentals on a property bought 5 years ago offer good yields.
It is just a problem for those who entered the market late!
And this is the warning - hot markets - entered late are a very bad investment.
Whereas, markets that will become hot - entered early are fantastic investments.
How do you tell the difference? Well, that is the topic of this blog - and what I'll be attempting to do as I travel around the UK and Central and Souther Europe this summer.
I think most of us would agree, that these markets are still in early phases of growth - but let us see how early - and how hard it is to invest (this is the problem with entering early - the infrastructure doesn't exist or is immature - making things harder - but not impossible).
Next stop - Crewe Station - let's see what the potential growth in Crewe over the next 5 years might be...
Cheers
Neil
ps. Please post your candidates for Success Club and Opportunity Club here...
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POSTED BY
NEIL LEWIS
ON
TUE 17TH JULY
AT
09:59 GMT
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TAGS:
Valencia Property, Spain Property, Romania Property, Property Investment, Budapest Property, Bucharest Property
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[ Back To Blog Home ]
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200% GROWTH CHALLENGE
Neil - I agree all you say about getting into markets at the right time. The last ten years have been very good in most countries, mainly because of falling interest rates and increasingly easy credit. This trend is now going into reverse and my view is that the next ten years will be far more difficult. The trend will be one of stagnation in property prices. The question is, of course, whether there are markets that will significantly buck that trend. It seems to me it is not inevitable that Bulgaria, Romania, Poland, Croatia, Ukraine etc will necessarily see very good further growth. The best may be behind us. Nor will Germany automatically do well just because it is cheap.
I too am chasing that ideal new market. My property portfolia is held entirely in Poland. However, I am beginning to wonder if the fundamentals may not in fact now be better in South America? (eg Uruguay, Argentina, Brazil) Could that be the place for the next 200% growth investment?
Any thoughts?
Stephen Barnes
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POSTED BY
STEPHEN BARNES
ON
FRI 10TH AUGUST
AT
23:22
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LATIN AMERICA
Hi Stephen
Thanks - yes, we are starting to consider Latin America - I think it is the next natural region once Eastern Europe has delivered its growth - but I still think it is in the wait and see mode.
For instance, there is a lot of interest in this region from Spain (due to history and language) and from our Spanish office we are considering these countries - but none strike us a obvious or immediate candidates.
I am particularly concerned by the selling of the Brazilian beach - I think this offers a great profit for the land holders (and agents) - but dreadful for off plan investors (another version of the Bulgarian coast in my view - where investors can't sell for years).
But, there will be some Latin American cities that benefit.
The big risk in many Latin American countries are
a) availability of finance
b) size of country (ie will it be overlooked by FDI)
c) currency and debt risks
... I have read the view that the region is sorting out its democratic credentials and this will make it more attractive than Asia (where Thailand has reversed the recent trend) etc...
So, we're open to this possibility - but on our initial reading - we think it is still too early.
Nevertheless, what you say about credit is true - and will affect all markets - which means I guess we should focus only on the strongest - and I think you can be a cautious investor in Central Eastern Europe and still find excellent growth opportunities.
Cheers
Neil
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POSTED BY
NEIL LEWIS
ON
SAT 11TH AUGUST
AT
08:46
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BRAZILIAN BEACH
Neil
Thanks for that. I agree with you. It may be too early for South America and that there is more to squeeze nearer home if careful.
Particularly agree about avoiding beach and non-core property. The Property Secrets strategy of concentrating on meeting the needs of local populations in sizeable cities is, I am sure, the best and safest one. In contrast, the demand for beach type property is very fickle and could well fall away quite fast if the world economy goes through a difficult patch and the cost of credit increases. I really don't know where all the buyers (and renters) are to come from for beach type apartments in Bulgaria, Morocco, Turkey, Montenegro etc...and indeed Spain and, as you say, Brazil. The World has a lot of beach!
Stephen
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POSTED BY
STEPHEN BARNES
ON
SAT 11TH AUGUST
AT
11:45
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[ Back To Blog Home ]
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Why are Romanian property prices high? Free markets, construction costs and Grannies
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A lot of people – myself included – were initially surprised by the prices of property in Romanian and need reassurance that we are not buying inflated prices or deals that are designed to fleece the foreign investor!
Now, obviously, the price of property shows huge variation based on city (Bucharest vs Sibiu), location (city centre, prime locations, outer-centre and suburbs) and type/ quality, but nevertheless there is a general expectation that the property would be cheaper.
There are two main things to say about this.
Firstly, the Romanian property market is a thriving free market and therefore when anything is being sold it is being sold according to what people will pay for it. Currently, property in Romania is selling to the local people and selling fast and this will inevitably drive prices higher.
This is good news for property investors who have already bought into Bucharest, Brasov of other Romanian cities. However, investors still considering Romania may need to hurry to avoid further prices rises or quite soon will probably have missed the boat in some of the more obvious areas – such as the central areas of Bucharest.
It is worth nothing that a number of developers have noted that their buyers have quite ‘ordinary’ jobs - such as a bank teller or a semi-skilled worker from a Siemens factory.
In addition, a number of developers have pointed out (again, with some surprise) that large numbers of home buyers are using a mortgage to obtain the property.
This means that the ordinary white collar workers can ‘afford’ today’s prices – but many are concerned that they will not be able to afford ‘tomorrow’s’ prices – so they are jumping into the property market as quickly as they can and of course, driving up prices in the meantime.
Also, there is clear evidence that the labour market in Romania is showing similar signs to that in Spain. That is, that there is massive differentiation between subsistence farmers (perhaps on €50 euros per month) and bank tellers /supervisory workers who might earn €600+ per month. (Note we know of some building site workers currently be paid €1,000 per month – such is the need to finish a project).
(Clearly, managers and (especially engineers) are earning considerably more – but I am sticking mainly with ‘ordinary jobs’).
The second similarity that I am seeing between the Spanish and Romanian labour market is that both partners – husband and wife – go out to work. This effectively doubles the salary for the couple – so long as there is no cost of childcare – and here lies the Latin secret – that Brits and north Europeans will easily overlook – the grandparents!
The family – and grandparents – play a very important part in Romanian life. It is very common for grandchildren to be left with grandparents whilst the children (now adults of course) go out to work.
And by golly – they know how to work!
I was surprised by standard Spanish working hours – typically 9.30 to 7.30 and a number of successful managers working on Saturday’s too.
Equally, have spent most of my last two weekends working – all day Saturday and Sunday too if necessary – it is clear that the work ethic is alive and well in Romania just as it is in Spain.
Why? Well, firstly, people don’t have huge wages, so the only way to access the things they want is to work hard – and progress via pay rises, promotions and new jobs, and more immediately, they just work more hours and earn more money!
So, I believe that whilst Nokia may have made its decision to place its factory in Cluj-Napoca and INA Schaeffler in Brasov – both investing upwards of €100m each – based on low costs – this doesn’t prevent smart or hardworking (or both) Romanians from earning much, much more.
Lastly, this phenomenon of massive jobs growth and low productivity growth was a key feature of both the Spanish and the UK jobs market during the early and middle years of the property booms in those two markets. (It is only now that productivity has become the watch word in those two countries – mainly because everyone is already working all hours in the day and it is the only way to take this forward).
Secondly, the price of land and construction has risen massively and any fat margin that the developers may have had is now seriously at risk.
As a reminder, there are 3 components in any new build development
- land cost
- construction cost
- development margin (which covers the promotion, negotiation and the equity risk)
It is important to remember that the constructor quotes for a job and gets paid by the developer for following a schedule. In the world of corporate finance this is a very secure income with little risk and therefore historically the profit margin will be slim – as not much risk is being taken by the constructor.
The developer on the other hand carries the investment risk or equity risk. He stands to make (or possibly lose) large amounts of money and therefore, for it to be worth his while, he needs to have a project that shows a large margin – in Romania this can be upwards of 40%.
Clearly, in new emerging markets there are more risks that in established markets and I’d expect that with time the developer’s margin would reduce – but that this would be a 3 to 5 year cycle.
However, things aren’t happening like this in Romania at the moment.
To start with the cost of land has surged and secondly (and most importantly) the cost of construction has risen any where between 30 and 55%.
The construction costs have risen partly out of necessity (ie cement is 50% more expensive in Romania than in Austria and there is a world shortage of steel – which is also driving prices) plus the fact that higher quality developments need to important more non-Romanian materials to finish a project and these are currently very expensive (due to the lack of volume).
However, construction costs are also rising because labour costs have jumped and there simply are not enough construction teams to meet the surge in construction demand.
In fact, a number of developers in Romania are turning to Turkish construction firms because they have large teams (500+) who can be brought to bear on a project and ensure swift completion.
In addition, the construction firms are now spoilt for choice – they can pick and choose their projects such that they are able to pad their prices.
This leaves the developer with a dilemma – do I sell the land now and take a profit – or do I persist with development?
Most are deciding to persist with development and have come up with clever ideas on how to reduce the construction costs. Some developer have decided to become constructors and subcontract the different parts of the work others have been more imaginative and are building cement factories on their building sites (so that they don’t have to worry about Bucharest traffic and the unreliable deliver of cement nor the very high prices).
Either way, it is clear to me that whilst money is clearly being made in this market, no developer is ‘cleaning up’ nor ‘fleecing foreign investors’.
It is understandable that investors should have these concerns – especially as a lot of so called property investment groups invite developers to add 10 to15% to the price (this was reported to me by an experienced developer who was recently working in the Budapest, Hungary market) before selling it on to the UK investor.
It is also a valid concern since the black sea coast is not far from here – and again the agent commissions on many of these apartments are very high (15% typically- which is why agents are so keen to promote them!).
However, it remains that case that the developers I have met have decided to work through this difficult phase (rising costs and shrinking margins) and not sell their land because they want to build a property development company and brand and recognise that this will take 5 to 10 years.
This is excellent news for property investors, because it means that they can not afford to get it wrong for their early property buyers and that ‘overpricing’ of units is going to destroy their longer term plans.
I am not saying that there aren’t sharks - nor am I saying that property developers will knowingly undervalue their property – but I am saying that the long term view of that they have of their business means that they will not work with the wrong partners and they will price their property according to the market.
Hence, I am confident that the prices being paid by our property secrets investors are fair market price (or better where we have either negotiated a discount or are able to buy below market value in pre-phase 1 – where a developer will knowingly keep his prices slightly below the market for a small number of units in order to quickly prove the concept of his project).
I am also confident that the nature of the labour market – massive expansion of the number of jobs – and both partners working – plus the promotions and 10%+wage increases – will create the affordability to buy and own property now and in the future too.
Having said that – I also think we will see property prices quickly lift (ie within the next 12 months in Bucharest and 24 months in 2nd and 3rd tier cities) to reach the current affordability ceiling – at which point the annual growth will be more inline (but slightly about) wage growth.
Lastly, the Granny influence will have one last effect. Adult children will want to buy property near their parents - so that the Grannies and Grandpas can look after the children. Developers are also noting that this is a very strong influence in decisions to buy.
Some one once told me that the Spanish economy rested on the grandparents love for their grandchidren - I think it will be the same in Romania.
Cheers
Neil
ps. One last thing to note - old apartments have been rising in value by 25%+ each year for the past 3 or 4 years. Why? Simple - people moving to the cities to take up jobs that have been created by the massive economic expansion taking place in key Romanian cities. This is a trend that will drive up all property prices AND because the properties are owned without a mortgage a seller can easily take a loan for €20,000 to pay for the new property.
Currently, new build property is priced only slightly (10 to 15%) above existing property - and therefore, new build property is still in its 'take-off' stage.
Lastly, will a big expansion in supply dampen the demand and price growth? Unlikely, planning is still slow and therefore acts as a brake on development, but take Spain as an example - this country was able to build 600,000 units per year in 2004 and enjoy 25%+ per year growth.
Current projections show Bucharest with 15,000 units per year (this might be 30,000 across the country) and therefore currently just 5% of the Spanish peak in construction).
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POSTED BY
NEIL LEWIS
ON
WED 1ST AUGUST
AT
05:11 GMT
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TAGS:
Spain Property, Spain Property, Romania Property, Cluj-Napoca Property, Bucharest Property, Brasov Property
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[ Back To Blog Home ]
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Why are Romanian property prices high? Free markets, construction costs and Grannies
|
A lot of people – myself included – were initially surprised by the prices of property in Romanian and need reassurance that we are not buying inflated prices or deals that are designed to fleece the foreign investor!
Now, obviously, the price of property shows huge variation based on city (Bucharest vs Sibiu), location (city centre, prime locations, outer-centre and suburbs) and type/ quality, but nevertheless there is a general expectation that the property would be cheaper.
There are two main things to say about this.
Firstly, the Romanian property market is a thriving free market and therefore when anything is being sold it is being sold according to what people will pay for it. Currently, property in Romania is selling to the local people and selling fast and this will inevitably drive prices higher.
This is good news for property investors who have already bought into Bucharest, Brasov of other Romanian cities. However, investors still considering Romania may need to hurry to avoid further prices rises or quite soon will probably have missed the boat in some of the more obvious areas – such as the central areas of Bucharest.
It is worth nothing that a number of developers have noted that their buyers have quite ‘ordinary’ jobs - such as a bank teller or a semi-skilled worker from a Siemens factory.
In addition, a number of developers have pointed out (again, with some surprise) that large numbers of home buyers are using a mortgage to obtain the property.
This means that the ordinary white collar workers can ‘afford’ today’s prices – but many are concerned that they will not be able to afford ‘tomorrow’s’ prices – so they are jumping into the property market as quickly as they can and of course, driving up prices in the meantime.
Also, there is clear evidence that the labour market in Romania is showing similar signs to that in Spain. That is, that there is massive differentiation between subsistence farmers (perhaps on €50 euros per month) and bank tellers /supervisory workers who might earn €600+ per month. (Note we know of some building site workers currently be paid €1,000 per month – such is the need to finish a project).
(Clearly, managers and (especially engineers) are earning considerably more – but I am sticking mainly with ‘ordinary jobs’).
The second similarity that I am seeing between the Spanish and Romanian labour market is that both partners – husband and wife – go out to work. This effectively doubles the salary for the couple – so long as there is no cost of childcare – and here lies the Latin secret – that Brits and north Europeans will easily overlook – the grandparents!
The family – and grandparents – play a very important part in Romanian life. It is very common for grandchildren to be left with grandparents whilst the children (now adults of course) go out to work.
And by golly – they know how to work!
I was surprised by standard Spanish working hours – typically 9.30 to 7.30 and a number of successful managers working on Saturday’s too.
Equally, have spent most of my last two weekends working – all day Saturday and Sunday too if necessary – it is clear that the work ethic is alive and well in Romania just as it is in Spain.
Why? Well, firstly, people don’t have huge wages, so the only way to access the things they want is to work hard – and progress via pay rises, promotions and new jobs, and more immediately, they just work more hours and earn more money!
So, I believe that whilst Nokia may have made its decision to place its factory in Cluj-Napoca and INA Schaeffler in Brasov – both investing upwards of €100m each – based on low costs – this doesn’t prevent smart or hardworking (or both) Romanians from earning much, much more.
Lastly, this phenomenon of massive jobs growth and low productivity growth was a key feature of both the Spanish and the UK jobs market during the early and middle years of the property booms in those two markets. (It is only now that productivity has become the watch word in those two countries – mainly because everyone is already working all hours in the day and it is the only way to take this forward).
Secondly, the price of land and construction has risen massively and any fat margin that the developers may have had is now seriously at risk.
As a reminder, there are 3 components in any new build development
- land cost
- construction cost
- development margin (which covers the promotion, negotiation and the equity risk)
It is important to remember that the constructor quotes for a job and gets paid by the developer for following a schedule. In the world of corporate finance this is a very secure income with little risk and therefore historically the profit margin will be slim – as not much risk is being taken by the constructor.
The developer on the other hand carries the investment risk or equity risk. He stands to make (or possibly lose) large amounts of money and therefore, for it to be worth his while, he needs to have a project that shows a large margin – in Romania this can be upwards of 40%.
Clearly, in new emerging markets there are more risks that in established markets and I’d expect that with time the developer’s margin would reduce – but that this would be a 3 to 5 year cycle.
However, things aren’t happening like this in Romania at the moment.
To start with the cost of land has surged and secondly (and most importantly) the cost of construction has risen any where between 30 and 55%.
The construction costs have risen partly out of necessity (ie cement is 50% more expensive in Romania than in Austria and there is a world shortage of steel – which is also driving prices) plus the fact that higher quality developments need to important more non-Romanian materials to finish a project and these are currently very expensive (due to the lack of volume).
However, construction costs are also rising because labour costs have jumped and there simply are not enough construction teams to meet the surge in construction demand.
In fact, a number of developers in Romania are turning to Turkish construction firms because they have large teams (500+) who can be brought to bear on a project and ensure swift completion.
In addition, the construction firms are now spoilt for choice – they can pick and choose their projects such that they are able to pad their prices.
This leaves the developer with a dilemma – do I sell the land now and take a profit – or do I persist with development?
Most are deciding to persist with development and have come up with clever ideas on how to reduce the construction costs. Some developer have decided to become constructors and subcontract the different parts of the work others have been more imaginative and are building cement factories on their building sites (so that they don’t have to worry about Bucharest traffic and the unreliable deliver of cement nor the very high prices).
Either way, it is clear to me that whilst money is clearly being made in this market, no developer is ‘cleaning up’ nor ‘fleecing foreign investors’.
It is understandable that investors should have these concerns – especially as a lot of so called property investment groups invite developers to add 10 to15% to the price (this was reported to me by an experienced developer who was recently working in the Budapest, Hungary market) before selling it on to the UK investor.
It is also a valid concern since the black sea coast is not far from here – and again the agent commissions on many of these apartments are very high (15% typically- which is why agents are so keen to promote them!).
However, it remains that case that the developers I have met have decided to work through this difficult phase (rising costs and shrinking margins) and not sell their land because they want to build a property development company and brand and recognise that this will take 5 to 10 years.
This is excellent news for property investors, because it means that they can not afford to get it wrong for their early property buyers and that ‘overpricing’ of units is going to destroy their longer term plans.
I am not saying that there aren’t sharks - nor am I saying that property developers will knowingly undervalue their property – but I am saying that the long term view of that they have of their business means that they will not work with the wrong partners and they will price their property according to the market.
Hence, I am confident that the prices being paid by our property secrets investors are fair market price (or better where we have either negotiated a discount or are able to buy below market value in pre-phase 1 – where a developer will knowingly keep his prices slightly below the market for a small number of units in order to quickly prove the concept of his project).
I am also confident that the nature of the labour market – massive expansion of the number of jobs – and both partners working – plus the promotions and 10%+wage increases – will create the affordability to buy and own property now and in the future too.
Having said that – I also think we will see property prices quickly lift (ie within the next 12 months in Bucharest and 24 months in 2nd and 3rd tier cities) to reach the current affordability ceiling – at which point the annual growth will be more inline (but slightly about) wage growth.
Lastly, the Granny influence will have one last effect. Adult children will want to buy property near their parents - so that the Grannies and Grandpas can look after the children. Developers are also noting that this is a very strong influence in decisions to buy.
Some one once told me that the Spanish economy rested on the grandparents love for their grandchidren - I think it will be the same in Romania.
Cheers
Neil
ps. One last thing to note - old apartments have been rising in value by 25%+ each year for the past 3 or 4 years. Why? Simple - people moving to the cities to take up jobs that have been created by the massive economic expansion taking place in key Romanian cities. This is a trend that will drive up all property prices AND because the properties are owned without a mortgage a seller can easily take a loan for €20,000 to pay for the new property.
Currently, new build property is priced only slightly (10 to 15%) above existing property - and therefore, new build property is still in its 'take-off' stage.
Lastly, will a big expansion in supply dampen the demand and price growth? Unlikely, planning is still slow and therefore acts as a brake on development, but take Spain as an example - this country was able to build 600,000 units per year in 2004 and enjoy 25%+ per year growth.
Current projections show Bucharest with 15,000 units per year (this might be 30,000 across the country) and therefore currently just 5% of the Spanish peak in construction).
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POSTED BY
NEIL LEWIS
ON
WED 1ST AUGUST
AT
05:11 GMT
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TAGS:
Spain Property, Spain Property, Romania Property, Cluj-Napoca Property, Bucharest Property, Brasov Property
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[ Back To Blog Home ]
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The Danger of Investing in Cheap Property
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The recent credit crisis is highlighting the danger of cheap property.
"So Cheap The Market is Bound to Explode" - a typical sales man's pitch as reported by the FT in a recent article on falling prices in Florida.
For many months on the Property Secrets forums we've been debating whether 'expensive' property in Romania is a good investment vs 'cheap' property in Berlin (or Hungary).
My view is that the search for 'cheap' property is both financially dangerous and also a fundamentally flawed argument.
Why?
Because of the Apples and Bananas problem.
When you compare one development in Bucharest with another in Bucharest (or one in Warsaw with another in Warsaw) you can say that one is 'cheap' in comparison with the other.
You can also say that one development has future potential (which basically means that you believe things will happen in the future to increase demand and therefore prices for those properties).
However, you can not say that one development in Bucharest is 'cheap' or 'expensive' in comparison with Berlin, Bogna, Bogata or Budapest.
Why? Because the fundamentals that drive property in any city are - exactly that - fundamentally different.
And, there is not sufficient evidence to think that price growth in one city will affect another. (Okay, in the UK we are all used to a ripple affect - but the UK is an exceptional country for many reasons; 1. It is an island! 2. It is very dense (and really just one big city) 3. It is a small island that has been develop over hundreds of years and has limited unused spaces...)
If we take another country - Spain - we can see that the ripple effect has no impact. For instance, two of the fastest growing cities - Madrid and Valenia are seperated by mountains - in the middle of which lies Teruel, Spain's cheapest and poorest performing property market.
No ripple effect there, then.
So, once we look outside small dense islands, we see that the ripple effect doesn't apply.
And that means you can not imply that Berlin prices will rise just because there is a boom in Poznan and Warsaw (the nearest neigbours).
There may be a boom in Berlin IF (and it is a big IF) the economic development of the Polish / German border delivers substantial GDP growth and starts to feed new investment into Berlin's local economy.
... but the point is that we have now switched from talking about property markets and property price ripples to economics...
... and if the economic case for Berlin was strong, then we'd believe that investing in Berlin would be a good idea (regardless of its relative cheapness or expensiveness).
Hence, it is time to stop worrying about whether a development 'feels' cheap or expensive and instead ask ourselves these two questions
- 1. Is the development good value in comparison with neighbouring developments in the same city (you can ask a valuer to provide this information as we do in any of our investments as well as build some local comparative analysis of similar properties in the same city - see some of our Investment Reports for examples of this...)
Please do not fall into the trap of thinking that a #40,000 flat on the Bulgarian coast is cheap and good value - because a flat on the Spanish coast might cost you #100,000.
The chances are that they will now both go down in value (Bulgarian coast very rapidly, and Spanish coast moderately - which will only serve to make the Bulgarian coast look even cheaper!).
Likewise, Florida might look 'cheap' now but it is only going one way, price wise.
My view is that it is 'cheap' for a reason - and that is that there is a lot of supply and not much demand.
So, what is the solution? Well, stick to the two key questions listed above and this will (inevitably) lead you to invest in cities with excellent mid to long term growth prospects.
Find these cities, then find a good value investment - by comparison with other developments in the same city ... and there you have it.
Just don't fall into the trap of buying anything that is 'cheap' and missing out on all the 'expensive' stuff - which has all the potential for capital growth.
Cheers
Neil
ps. Putting this another way - you can 'value invest' in stock markets - but if you try the same in property markets you'll get burnt.
pps. Is Sofia cheap in comparison to Bucharest (this is a question we get asked a lot) and it can not be answered. What we can say is this - Sofia is at an earlier stage of development than Bucharest - therefore offers more opportunity (perhaps) - along with more risk (perhaps).
ppps. A trend I have noted is that bigger investors like more expensive units! They 'just' buy cheap...
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POSTED BY
NEIL LEWIS
ON
TUE 27TH NOVEMBER
AT
10:24 GMT
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TAGS:
Spain Property, Sofia Property, Property Investment, Property Economics, Florida Property, Cheap Property, Bulgaria Property, Bucharest Property
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