an excellent, fascinating and encouraging post. many thanks. just the sort of story ignored by the mainstream media with their clamour for the latest economic drama (noise). one question: any idea about the two uncharacteristic regions of expected employment shrinkage in poland? dan

Hi Dan 'Population Shrinkage' is an issue almost as covered in prejudice as 'immigrants taking our jobs'. The key issues for property investors are 1. Shrinkage in households - massively increasing demand for property with the SAME population 2. Lots of people departing the countryside for cities or abroad (giving country wide reduction in populaton but moderate increases in cities - larger increase in key cities - but a country wide population reduction). (Note - nobody - not no one is proposing investments in the Polish countryside!!! Only the cities - and this is nothing like 'Poland's average' - because (unlike the UK where 85% of people live in urban areas - this is where only 50 or 60% of people in Poland live). 3. The cities are delivering huge employment growth. This is not on the back of large immigrant populations (as per mature countries such as UK) but on the back of female worker emancipation! (Such as has supported the Spanish growth and property price boom over the past 10 years). 4. Therefore, the population of Poland can shrink - and yet deliver massive price growth in key cities. So, we have got different dynamics driving different parts of Europe! It is confusing - for sure - but where there is confusion - there is massive investment opportunity for those willing to set aside their prejudices and think clearly. Okay - I'll stop! Hope this helps. Cheers Neil

Hi Dan Thanks for that. Just to explain - we've had a little forum problem this morning and your post originally turned up under a post from Neil that related to another Blog! All very confusing - but that is why Neil is talking about population shrinkage and not jobs shrinkage which is what you asked about! I think there is a good explanation for the two small areas of Poland that are forecast to deliver lower jobs growth and I've asked our Polish expert - Anna Grybel - to come back on this, as I think she'll do a better job than me! cheers

Those two regions in Poland are Opolskie Voivodship (light blue) and Świętokrzyskie Voivodship (dark blue). The first region is overshadowed by neighbouring strong, economic regions attracting investors – Silesia with Katowice and Lower Silesia with Wrocław. The official unemployment is also high there because many residents have German citizenship and work abroad, but are still registered as unemployed. The dark blue region has been traditionally poor region in Poland. Forest and mountains cover most of the area, so there’s no much room for developing industry and economic expansion.

Hi Anna Thanks for this. To paraphrase you - you are saying 'invest in booming cities, not in forests or mountains'... ... I know this is stating the obvious - but this is what people who fret about Poland's country wide population statistics are forgetting... Cheers Neil

thanks, neil, robin and anna for rapid pesponses. this all supports a feeling i've long held: nations are not always a useful category of analysis. there is no 'UK property market', only a collection of many geographic markets within the UK, each behaving differently at any one time. a national average is of abstract interest. same for poland. and even within cities: there are parts of the london market currently as red hot as ever, others on the slide. seems similar in warsaw. but nice to see evidence of how many strong geographic markets are predicted to flourish within CEE over next decade. dan

Hi Dan Spot on - property is a local game! However, there are some useful things you can say at a national level - such as GDP etc... but it is worth remembering that this is principally a summation of the key points of growth (ie key cities) and doesn't necessarily include the trees! Cheers Neil

Robin, reeally excellent article - thanks. I've been fascinated in population stats since hearing a talk by Andrew Neil a couple of years ago. The fact is that there are a lot of countries, most of them the "old" European countries you refer to, who simply won't have enough working people to support the older population in 30 or 40 years time. I've since heard people say that this argument is rubbish as people will work longer and harder. However, there's a limit to how much this is possible, whether due to willingness, physical ability etc so I don't accept this argument. The stats for Poland are strange bearing in mind it's a catholic country! Does it also start from the base of many of its young people being abroad and/or make assumptions about how many will return? Do you have any view on this? Huw

Dan I completely agre with your theory. National stats can be useful indicators, and certainly government characteristics (on a national level) as well as mortgage markets are important. As far as GDP growth and economic success, even smaller countries show big diversity. You're always going to have to look at the general state of a country first (politics, economics, and so on), but understanding that this is only a segment of the story is, as you imply, essential. So, it's really all about which cities - even cities within countries that may seem a little less than attractive in general for property investors. cheers

I think UK will remain strongly attractive as long as the pound remains such a strong currency. For people wanting to earn and save as much as possible London is the most obvious choice in Europe and probably the world. I think it brings people here and it keeps immigrants here as well, often for longer than what they originally intended. I think a lot of immigrants view London as a place where they can save at least twice as much and it is a city that is not a great lifestyle but not a terrible lifestyle either. As for immigrants impact on UK, it is clearly positive from an economic perspective. If low cost hardworking CEE immigrants were not available in the UK, some companies would move elsewhere. I also think the influx of low cost workers has helped keep a lid on inflation and thus had an impact on interest rates. But surely there is more to quality of life than GDP? Some people clearly think this and are leaving the UK in large numbers not out of prejudice but its a fact you can get a lot more for your money in terms of accommodation elsewhere and without overloaded transport systems. There are larger numbers to replace them thogh and I think there always will be as long as the pound remains strong.