Prior 2007 I would agree with you, that Germany and Hungary would be best avoided, however BOTH of these countries are on the path to recovery. The key points for investing are the following when choosing property. + Low valuations (in terms of price-to-incomes), + Falling interest rates, + Rising incomes - and hence improving ability to pay high rents, or larger mortgage payments + Sentiment negative, but getting no worse, and set to improve. These are the key ingredients to finding a good investment, where Property Secrets FAILS is the last on the list - consistantly. Germany are at the bottom of the cycle RIGHT NOW - exactly the time to invest. Not only that, but Germany has an economy that is in recovery - EXACTLY the time to invest - prior to every company at the Property INvestors Show starts to market them. Hungary is undergoing painful budgetary cutbacks - long overdue to right themselves onto the path of Euro currency adoption 2010 - 2012. The result of this will be a fall in incomes 2008 - something expected and this will correct with wage increases 2009 and beyond. By 2009 time all the "property marketing" companies will be pushing up prices in Hungary and Germany - an effect Hungary has avoided since 2002 /03. So in conclusion Germany is the safest investment now - the LEAST risky and as for Hungary - my strategy is already in motion; I have purchased even though it is slightly more risky than Germany - since interest rates are high and although the currency is a little wild, I have purchased in Euros thus limiting the risk. After completion I will revalue and refinance and buy another - prior to Euro entry. Either that or buy in USA after the Crash has bottomed out in 2009/10. Im not investing because of the likely speculator boom - but rather because of the lack of one compared to the other new EU accession contries NOW,-as the Western Economies look seriously dodgy - rediculous debt being the key symptom. As always be careful in what you read - there are Vested Inerests where ever you look purely because so many have vested so much into the property market and the fact that Gordon Browns whole economy strategy is based upon equity release spending. Your statement that "because the media reports what some of these people say, it must be true - so take heed and stock up on candles now!" The question is not only whether it is true or not (strong evidence for it) but rather you should be reading the papers - seeing the news - hearing of the soaring debt and repossessions and realise before its too late that recessions are self fulfilling predictions - as the voices get louder and the fear turns to panic - it WILL BE TOO LATE. It is the public perception of reality - not reality itself that dictates when the crash (I prefer to use the word 'Correction') will occur which is why the media will play such a huge role in events. Search UTube for house price crash and you will find that even the BBC are turning from the boom mentality.

I agree with a lot of what you say Richard. Western Europe & the US is highly over valued. Germany has bottomed and if you are going to take the long term view as PS's article keeps saying then then I believe Germany is a good option. The article keeps talking about the fundamentals being fine in the UK. What about the rising interest rates? huge debt? High inflation? Low salary increases?

Hi Tom You can take a long view on Germany and not worry about the next two years - that is true and valid. However, it is really clear to me that Germany is still not ready. See this weeks FT property section - it talks about all those people who bought blocks of german social housing and are now trying to exit the market as quickly as possible. Why? No growth - and none of the tenants wanted to buy their rented apartments (or if they did - just a few, leaving the investor with a 'swiss cheese'). My view is that confidence needs to return to the German market first - and when it does, along with propert mortgage products (ie banks get confident too) then that will be the time. Will I miss the boat? Not a change - the country is huge and cities are a long way from each other - if one city starts to move - go for it (if you miss it there are many other perfectly good options). After all, Germany also (really) includes Switzerland and Austria (as these have had mainly stagnant property markets too) and that is around 100m people. I support Simon T's view that Germany is not for now - it will be - but not now. That is also my view on Hungary - and good luck to the brave investors who are willing to go in when interests base rates are at 8%. It is a big risk - but clear one that some people are willing to take. I'm just not willing to take that risk relative to the opportunities else where. So, both countries have the potential - but not yet - there isn't any hurry. Unless someone can show me some real sustainable property price growth - in which case we'll come around to the argument. Cheers Neil

I bought cash, - no mortgage - the sooner i can get my money out of pounds into Euro's the better since the pound will fall soon, as the housing market flounders.

Hi Richard - that's an interesting investment strategy! Here's a major complication with Hungary - most mortgage loans in Hungary are based on Swiss francs (not yours - but most) - if the Hungarian to Swiss currency remain stable - then fine - if Hungarian debt problems escalate there could be a run on the currency and this would drive up the cost of servicing a foreign currency loan - we are seeing with the US dollar that excess debt (in the long run) is being resolved by adjustments in currencies - we expect the hungarian currency to fall against strong currencies at some point (don't know when) - if (or when) this happens, then the cost of mortgages could double in a matter of a few months and this will kill the Hungarian property prices - if you hold long/ v long - you'll be okay (probably) but it could be very nasty So, although using cash gets rid of your personal risk - it doesn't remove the risk that hungarian currency might crash and that would massively affect the housing market because so many home buyers have used foreign currency loans. Hope this helps Cheers Neil

The trigger for the crash in the UK will be Irelands CRASH - it will not be a soft landing. I know property secrets dont like the posting of urls - but this is a news article - very interesting article. http: / /www .rte .ie /tv /futureshock/

Your comment on Hungarian currency is understandable considering the Governments history on spending, however they have kept to their new convergence plan - and are cutting spending. This slight risk is why I opted for the Euro since their currency is locked fixed to a specific range of movement to the Euro ..... i think the fix is +/- 15% against Euro. Back to Ireland, consider how many Irish people invest in property abroad, there are 1000's of BTL investors in UK .... let alone the rest of the world. As world housing markets cool and the threat of Irelands crash hits home they will pull out of these global markets bringing their money home. That TV program above is scary stuff - makes it real for people, that reality is coming here - while you watch it, apply the reasoning to the markets you are in. The key question is how will a crash effect the market you are in - since every EU speculator market has a high % of Irish investors.

Hi Richard I agree with Neil - you do have a very interesting strategy! Germany has been in the doldrums for years and there are no immediate signs of a recovery. Hungary's woes are laid out clearly by Neil. While you wait for the doom scenario for the next couple of years I predict that you will have missed a lot of growth in other locations. If you don't like the real boom places like Poland and (potentially) Romania, you should look at the fundamentals of somewhere like Slovakia with low inflation, rapidly lowering unemployment (now 8.89%, lower than France and Germany) and on target for Euro adoption in 2009. As interest rates increase here in the short term the pound will remain strong (an argument for investing somewhere which deals in USD such as the Caribbean) and when they fall back probably next year the pound is likely to fall back to its usual trading levels. As far as Ireland is concerned I tend to agree with you but disagree on any crash there leading to a crash elsewhere. At the end of the day it's a small economy and has unique factors at play. Ultimately, however, it has a very successful economy, low taxes etc so a slow down (more likely than a crash) wouldn't be a bad thing. As for the BBC jumping on the bandwagon, what else would you expect!? Makes a good story. Tom, the big risk with inflation is higher salary increases feeding through - if salary increases stay low inflation won't be a problem. Time will tell... Huw

Richard, I tend to agree with a lot of what Hugh says about Slovakia, which is no coincidence given that we are both investors in that country. I also agree with him on the subject of Ireland. If Irish investors pull money out of overseas markets, I cannot see it having any real bearing locally (with the possible exception of the UK). The population is relatively small, and a very small proportion of the total population own property overseas. (If you take Slovakia as an example, 95%+ of property buyers are from the local market - the actual figure is nearer to 97%. Irish investors leaving will barely dent this figure). That said, on the subject of crashes, I agree with you completely about perception (rather than reality) being 9/10ths of the law. For this reason, I agree with you about the possible link between the UK and Ireland. Cheers, Dave.

I just want to pick up on one aspect of this article, where Simon Tweddle comments as follows: 'Historically, property prices have doubled in the UK every seven years on average since World War II. There is no reason to think they will not do the same over the next seven years.' Whilst the first part of this comment is obviously perfectly true, the second part to me is, quite franky, absolutely absurd. It's a bit of a throw away line and the kind of comment that is often trotted out by people about property as an investment. However, to double your money in 7 years, UK prices would need to increase by a shade over 10% p.a.. I am surely not alone amongst PS investors in being able to think of plenty of reasons why this will probably not happen over the next 7 years! Dave.