Robin et al, advice please.
I have just flipped an apartment at Future City 2B and would like to use the money to buy something here in the UK when the market bottoms out.
Should I leave the PLN in my Polish account in the hope that it strengthens against Sterling over the next several months or bring it back now before it gets smashed even more?
What do you think????

Eleanor

Wow! A currency call is always one of the toughest, I think.

Having said that, personally, my best (as educated as possible) guess would be that now is likely to be a good time to switch to sterling. It was oversold, I believe, and it seems to be reviving. We haven't heard any talk of parity with the euro now for a while and I believe that Poland hasn't really felt anything like the worst of the recession yet, whereas the UK is right in the storm now.

Then again....

Hope this helps a little

cheers

Hi

If I was in the position I would repatriate to UK now , reasons being that I undertand that Polish interest rates will drop further and ressession seems to have spread in an easterly direction starting in the US although I am no expert. There were some predicting that the UK £ would start to strength a bit against the euro and other currencies in the coming months. This is my best GUESS

Good luck

Paul

Hi Eleanor,

Do you mind if I ask you what PLN/sqm you got for your flip, size of apt., when you did it and how many bedrooms your apartment had?

I would appreciate the info as I'm thinking of doing something similar...

Thanks, Neil

Thanks guys. I will bring it back now so prepare for PLN to reach record highs v GBP immediately after. Ha ha.

Neil, it was a one bed apartment, 51 sqm and I got 7250PLN/sqm. That's roughly 18% gross return which I'm not going to complain about given the current climate.

I put it on the market in September last year, got my one and only offer early January and completed yesterday. I used an agent in Krakow recommended by a friend who had used him previously. Let me know if you want his details.

Eleanor.

Hi Eleanor,

That would be very useful if you could post the name and company thanks.
Could I also ask you what floor it was on?

Thanks for your reply and info...

Neil

The fundamentals of the weakness of the Polish ZLoty are currenttly tied into the delayed reaction of the Polish Government to the fact that the economy is going to be much weaker over 2009 than they have projected in their deficits (18bn PLN) and that is why they are now running around trying to find savings. The Polish Treasury is having a hard time to raise funding in Zloties and is now looking at raising in CHF and JPY, this has further frightened the market. The Market expects the deficit to overshoot and that the economy will be worse than the revised (downwards) official figures of 1.9% GDP growth (could be as low as 0%).

Rather than cut rates the Central bank of Poland may be forced to raise interest rates due to a continued weakening of the currency and the treat that this starts to import inflation (this would be a train crash for the economy). This is a factor that will already start to play. On the positive side is that the weakness is very much welecome for exporters, or outsourced service centres.

You will not see strength back in the PLN for some time, and I would not put out of the question a peak of 4.80 plus against the Euro sometime in the next 2-3 months.

People "hanging on" who have FX loans had better be in for a rough ride in the next year, and not to expect to see FX rates that have been available in the last 3-4 years for quite some time. If you have the means to ride it out, all fair and good, however don't be optomistic.

If you are looking at taking out an FX mortgage NOW, not a bad strategy, just it could be difficult to get one.

Hi,

I have received the same proposal from Noble Bank and still can't make a decision, plus my advisor at Open Finance is away on "urlop" (meaning holidays!). I am going to have my contracts looked up by a friend who is in the banking business in Zurich and hope to have news soon. Please kindly share any information as I will gladly do the same.
We have more real estate investments in Poland and never had any problem, all properties rented and running smoothly as we work with a great company there with wonderful people. That is why we made the decision to go on investing but this time instead of paying according to the traditional polish way: you pay it all and you get the key and the deed, we decided to ask for a mortage on the 4 new investments and paying it out with the rent of the rented properties. Big mistake????
Any way out??
Any ideas??
Thanks!